Mentha Oil market under fresh selling; Support seen at 1599.4
MCX Aluminium under fresh buying; Support seen at 130.7
MCX Nickel may trade in a range between 848.1-901.3
Technically, some traders feel last week’s sell-off may have been a little overdone given that there are five more weeks left in winter.
Technically market is getting support at 185.7 and below same could see a test of 180.4 levels and resistance is now likely to be seen at 196, a move above could see prices testing 201.
Natural Gas on MCX settled up 3.24% at 190.90 settled up holding on to earlier gains after gapping higher on the opening on Monday. The price action is likely being fueled by short-covering and profit-taking in reaction to oversold technical conditions and a change in the short-term weather forecast.
According to NatGasWeather for February 8 to February 14, “Cold air over the Midwest will continue to fan out and advance into the southern and eastern U.S. today and Saturday, including with a wintry mix of precipitation along the cold front across the East.
Temperatures behind the core of the cold front will drop into the -20s to 20s, but also with teens to 30s into Texas and the South. The West will be unsettled and cool to cold. A mild break will return across the southern and eastern U.S. early next week before another cold shot arrives mid-week with warming then following late week.
Overall, national demand will be high Friday-Monday, then moderate for the rest of next week.” The price action is likely being fueled by short-covering and profit-taking in reaction to oversold technical conditions and a change in the short-term weather forecast.
Over the weekend, forecast models converged on a colder pattern developing over much of the country in the 6-11 day or in the February 17-22 period. It's possible that this cold could persist through late February into early March which would increase natural gas prices even further.
Trading Ideas:
--Natural gas trading range for the day is 180.4-201.
--Natural gas rose on expectations of higher demand for the fuel as forecasts pointed to cooler weather.
--Gas production in the Lower 48, meanwhile, rose to 86.5 bcfd from a four-month low of 85.0 bcfd on Jan. 31.
--The U.S. EIA said that utilities pulled 237 billion cubic feet (bcf) of gas from inventories during the brutally cold week ended Feb. 1.
Courtesy: Kedia Commodities