Natural Gas and Crude Oil Market – Trade analysis for August, 14

We saw a steep fall in rupee yesterday and this had direct impact on Natural Gas and Crude Oil prices.

Yesterday, I recommended initiating short at 206, as that is major resistance for natural gas prices, looking at global trading charts. We can say this is crucial price testing point for NG.

Natural Gas Price -

The August contract yesterday did gain an upside momentum but didn’t touch 206 as predicted. Natural Gas gained this momentum due to increase in Dollar index and fall in rupee. Indian Rupee touched 68.96. 

Traders believe that there is more scope of Rupee falling down thus the prices of Natural gas might rally more if there is not much movement in global markets.

Looking at global markets, investor are paying attention to the supply/demand situation as we approach the end of the summer cooling season. With increase in production and decrease in demand we could sellers entering into the market.

Investors will majorly trade today based on the weather reports and supply available. If we see cooler weather in coming 10-14 days and production/ output increasing than prices might fall.

Crude Oil Prices -

Looking at charts and global trends we might see seller entering market but prices at MCX might gain momentum since we are expecting rupee to fall to 70.15 in a week or so.
For traders looking for fresh trades, I would advise initiating a Long position at 204.50 with target of 207.50 and SL of 202.50. Remember to trigger SL since trend might reverse and it might turn bearish.

If you have short positions in current contracts above 200 and can hold you positions, I would advise to wait and average your positions above 210. Natural Gas market currently are quite volatile and we can expect sellers to return. This market is currently moving upside only because of decline in Indian rupee.

Crude Oil

Looking at fundamentals in Crude Oil markets, we see a negative sentiment growing. Despite Saudi reporting dips in production in July, we still see huge supply which has been meeting demand.

It is quite evident that in global markets Crude Oil has been seeing downtrend but we might see a short upside momentum. For investors who are looking for less risky play, Advise would be initiate short on high.

Sell Crude at 4730 with target of 4640 and SL of 4780.

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