Natural fuel worth may drop from present ranges

Natural fuel worth may drop from present ranges

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The pure fuel futures (steady contract) on the MCX (Multi Commodity Change) hit a excessive of ₹760 final week. However then, the contract couldn’t prolong the rally and has moderated to the present degree of ₹626. To determine one other leg of uptrend, the contract ought to breach ₹760 decisively i.e., the contract ought to see a day by day shut above ₹760. Till then, the chance of the contract seeing additional drop in worth will stay excessive.

From the present degree, the pure fuel futures might see a decline in worth to ₹535. Though ₹600 is a help, the contract will most likely slip under this degree to drop to ₹535. A breach of ₹535 can drag the contract to ₹500.

So, given the prevailing circumstances, one can take into account initiating short-term promote trades.

Quick MCX pure fuel futures

Merchants can quick MCX pure fuel futures on the present degree of ₹626 and add extra shorts when worth strikes as much as ₹655. Place stop-loss at ₹685. When the worth dips under ₹600, revise the stop-loss all the way down to ₹660. When the contract touches ₹535, liquidate half of the shorts, and tighten the stop-loss additional to ₹585. Liquidate the remaining at ₹500.

Alternatively, one can take into account shopping for pure fuel 600-strike put choice (600-PE) on the MCX. It’s at the moment buying and selling at round ₹47. Accumulate extra when worth drops to ₹35 in order that the typical worth can be ₹41. Place stop-loss at ₹26.

Exit these positions on the prevailing worth when the pure fuel futures worth drop to ₹535. By then the worth of 600-PE would roughly be round ₹100.

Revealed on

August 01, 2022

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