January 31, 2012 NG: Near multiple resistances

MCX Natural Gas (NG) has fallen from a bearish flag pattern. After the sharp fall it has given a sharp pullback. The gas has reached the 20 day moving average (DMA). It has come close to the previous low (Rs144.7), which will now act as a resistance. The falling trendline would also put pressure on NG. The daily momentum indicator has been stretched to the overbought zone and is now expected to cool off. Unless NG crosses Rs145 on a closing basis it is expected to move lower and target Rs123.6 –118.8 ie 61.8% - 78.6% retracement of the bounce.