Potential Double top in Natural gas may halt current advance

Sign of potential double top has seen in Natural gas MCX hourly chart. As shown in chart above commodity has been fluctuating near its 23 days old resistance at 238.50 but couldn’t hold the gains above the same to confirm a bullish breakout. As we can see in chart provided above commodity has broken a steeper (green dashed) trend line and now getting support at another (black) trend line which is supporting the areas of 234. At the same time bearish divergence has seen on MACD daily chart which indicates weakening momentum in this commodity. Now trader’s eyes will remain on the areas of 234 and any failure of this level would bring a retest to 231-226-221 and more down side. Stability above 238 would keep bullish scenario intact and then commodity would lead a rally towards 242-247 and 270 zones over the midterm time frame.

Recommendation: Selling natural gas near the areas of 236-238 for targeting 231-226-216-206 with stop loss above 239 on daily closing basis might be appropriate.

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