MCX Natural Gas: Inverse Head and Shoulder Pattern and Elliott Wave Analysis
MCX Natural Gas 2 hour continuous chart
MCX Natural gas after forming a distribution pattern particularly rising wedge tumbled near about 420 levels. A sideways consolidation was seen in this energy sector, making it as a bullish reversal pattern.
From 2 hour chart, prices were moving in a falling channel which was breached thus opening positive possibilities. It was then turned into bullish head and shoulder pattern which was broken on the last trading day of the previous week, which opens further positive possibilities. MFI is in positive terrain and can move towards the overbought terrain.
As per Wave theory, prices have completed wave a in a complex correction (a-b-c-x-a-b-c) and has started wave b higher which can move towards 620-650 levels.
One can initiate buying of 500 CE which is trading at 66 with target of 105 Stop loss placed at 37.
The summation is MCX Natural Gas is positively poised and can move higher towards 620-650 levels with support at 511 (closing basis).