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The crude oil futures contract traded on the Multi Commodity Exchange is in a sideways consolidation phase, hovering between ₹6,318 and ₹6,500 a barrel.
A break out on either side of this range will decide the ensuing trend. Given the ongoing unrest in Iraq, the downside is limited. The bias is towards a bullish breakout.
There is a high probability for the MCX-crude oil contract to breach ₹6,500 in the coming days. Such a break out can target ₹6,550 immediately and ₹6,700 subsequently in the coming weeks. Short-term traders can play the current trend by buying on declines. Long position can be initiated at ₹6,350 with a stop-loss at ₹6,280 for the target of ₹6,480.
Alternatively, traders can also go long if the contract breaches ₹6,500 with a stop-loss at ₹6,460 for the target of ₹6,620.
MCX-Natural Gas: The MCX-natural gas futures contract found support near its 200-day moving average this week and bounced back. The daily chart suggests that there is a probability for the current up move to extend further to ₹283 per mmBtu – the 100-day moving average.
But the weekly chart indicates that a rally to ₹283 can trigger fresh selling interest in the contract. Hence going long at current levels, to catch the expected rally to ₹283 could be risky. Traders can stay on the sidelines and wait for a clear trading signal to emerge in the contract.
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