Page 7 - 1797_Value Plus Aug 2016

Natural Gas

Natural Gas:
Riding High On Impulsion

CMP: ` 188 (As on 03rd Aug, 2016) although impulsive but the development is still in the first
stage of 4th wave. It is to be seen from here that how prices are
Buy: ` 188-180 going to finish the 4th wave correction and break into the highly
impulsive 5th wave. There are two possibilities from here. One,
Target Price: ` 225-243 if prices successfully breach September contract high of Rs 205
at MCX or $3.0 at NYMEX, the recent dip will be assumed as 4th
Stop-Loss: < ` 173 wave bottom that ended in an almost zigzag correction. Two,
if prices fail to cross the above mentioned levels; we may see
On analyzing the trend in Natural Gas in last two the 4th wave ending in a structured pattern. However, the first
years, it can be clearly seen that the performance possibility has strong chances to take shape. Thus, we may see a
of the highly volatile commodity in 2016 has been quick, strong breakout anytime soon.
on the positive note so far. In the last five months,
the price movement has been ‘base building’ after a We recommend buying in Natural Gas September contract at
disastrous fall in 2015 which continued till February CMP Rs 188 and on dips till Rs 180 for targets in the range of
this year and pushed prices to multi year low of $1.6 Rs 225-243. Maintain stop loss below Rs 173.
per mmbtu on NYMEX.
7 ARIHANT CAPITAL ¡ AUGUST 2016
Currently, prices are trading at $2.8 per mmbtu
on NYMEX and are aiming to cross psychological
resistance of $3.0. At MCX, natural gas is trading
around Rs 188 per mmbtu after tumbling to
Rs 109 per mmbtu early this year. Taking a clue
from developments on technical chart, it seems that
prices are now well set to take a big leap from here
and move into another impulsive bullish territory.
The price structure as per Elliott wave theory is