Natural gas faces hurdle at Rs 195; can rally up to 33% thereafter

In case, the MCX Natural Gas futures manages to conquer the Rs 195 hurdle, a sharp rally towards Rs 260 - 300 seems likely.

As expected the MCX Crude Oil futures retraced after testing resistance around its 200-DMA. However, the road ahead of is likely to get complicated as the key moving averages are seen converging on the daily charts. 

Meanwhile, the Natural Gas futures are still awaiting a meaningful pullback rally following the sharp 80 per cent fall. For now, the Rs 195-level which is the 50-DMA remains a major hurdle for the commodity.

Here's what the charts suggest for MCX Crude Oil and Natural Gas futures:

MCX Crude Oil

Bias: Indecisive trend likely

Last close: Rs 6,568

Resistance: Rs 6,755

Support: Rs 6,380; Rs 6,300

The recovery in MCX Crude Oil futures as expected is proving to be short-lived, as the energy-based commodity faced resistance on multiple occasions around the 200-DMA and dipped thereafter.

The 200-DMA presently stands at Rs 6,755. In the recent trading sessions, the commodity made a high at Rs 6,843, and is now seen testing support around the 20-DMA at Rs 6,380.

The MCX Crude Oil futures are likely to enter a phase of indecisive movement in the near-term, as suggested by the price-to-moving averages action. 

On the positive front, the 20-DMA at Rs 6,380 has now crossed the 50-DMA and 100-DMA placed at Rs 6,300 and Rs 6,340, respectively, which is a positive sign. However, with the 200-DMA at Rs 6,755, still fairly above the shorter-term moving averages remains an overhang for the commodity.

In case, the MCX Crude Oil May futures manage to clear the 100-DMA hurdle, the commodity could face resistance around the higher-end of Bollinger Bands on the daily chart at Rs 7,100 level and then retrace. On the flip side, break and sustained trade below Rs 6,300, can trigger a sharp fall towards Rs 5,900-odd level.

According to the daily Fibonacci chart, the MCX Crude Oil May futures on Thursday may seek support around Rs 6,495 - Rs 6,470 - Rs 6,450. Whereas, on the upside the commodity contract may counter resistance around Rs 6,640 - Rs 6,665 - Rs 6,685.

MCX Natural Gas

Bias: Negative

Last close: Rs 184.90

Resistance: Rs 195

The MCX Natural Gas futures have been broadly trading in a band of Rs 170 to Rs 250 since late January 2023. In the recent past, the MCX Natural Gas futures rallied over 20 per cent from a low of Rs 160.40 on April 14 to a high of Rs 196.30 on April 19.

In the last three trading sessions, the Natural Gas futures have managed to sustain above the 20-DMA (Daily Moving Average) now placed at Rs 178, but have failed to convincingly conquer the 50-DMA placed at Rs 195.

It may be recalled that Natural Gas futures have tumbled as much as 80 per cent in the matter of mere eight months from a high of Rs 801 in August 2022.

For any meaningful recovery to materialize, the Natural Gas futures will need to pullback and sustain above the 50-DMA at Rs 195, which also coincides with the higher-end of the Bollinger Bands on the daily chart.

As and when the commodity manages to break above Rs 195, a sharp rally towards Rs 260 - Rs 300 can be expected.

On the flip side, the MCX Natural Gas futures have near support at Rs 178, below which the commodity could re-test the lows around Rs 163 level.

On Thursday, as per the daily Fibonacci chart, the MCX Natural Gas April futures are likely to seek support around Rs 179.30 - Rs 177.50 - Rs 175.80. On the upside, the energy-based commodity futures could face resistance around Rs 190.60 - Rs 192.30 - Rs 194.