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The Crude Oil futures contract traded on the Multi Commodity Exchange (MCX) has been in the limelight in the past week. It took support at around ₹2,975/barrel last week and began to trend upwards.
On September 29, the contract jumped 4.7 per cent, conclusively breaking through a key resistance at ₹3,150. Thereafter, the contract continued to move up and appears to have resumed its intermediate-term uptrend, which has been in place since a February low of ₹1,805.
The contract rose 1.7 per cent on Wednesday, breaching a key immediate resistance point at ₹3,250. This rally adds strength to the contract’s medium- as well as short-term uptrend.
The contract trades well above its 21- and 50-day moving averages. The daily relative strength index is featuring in the bullish zone and the weekly RSI is on the brink of entering the bullish zone from the neutral region.
Moreover, the daily and weekly price rate of change indicators are hovering in positive terrain, implying buying interest.
The short-term outlook is bullish for the crude oil futures contract. Traders with a short-term view can make use of dips to initiate fresh long positions with a fixed stop-loss at ₹3,200. Resumption of the uptrend can take the contract northwards to ₹3,400 and ₹3,450 levels in the near term.
An emphatic breakthrough at ₹3,450 will further reinforce the uptrend and take the contract upwards to ₹3,500 and then to ₹3,600 in the medium term.
The medium-term uptrend will remain in place as long as the contract trades above the significant support level of ₹2,900.
Immediate supports are placed at ₹3,250, ₹3,150 and ₹3,000. A strong plunge below ₹2,900 will mitigate the medium-term uptrend and drag the contract down to ₹2,800 and then to ₹2,650.
On the global front, WTI crude oil decisively broke above a key resistance point at $46 a barrel last week and continued its move up. It now tests a significant resistance at $50.
Immediate resistances are at $52 and $54. Supports are placed at $48 and $46.
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