The sharp fall in the crude oil futures traded on the Multi Commodity Exchange (MCX) appears to have found a temporary bottom. The contract fell to a low of ₹3,436 a barrel on Tuesday and has reversed higher.
Also, the contract has not recorded a daily close below ₹3,500 level, which is a positive in the near-term. Having said this, there is no immediate danger of a further fall as long as the contract trades above ₹3,500. There is an immediate resistance at ₹3,760. A break above this level can take the contract higher to ₹4,000 in the coming weeks.
ContractsHigh risk appetite traders can go long with a stop-loss at ₹3,470 for the target of ₹3,900.
The contract will get fresh selling pressure only on a strong close below ₹3,500. The next targets will be ₹3,450 and ₹3,400.
The downward reversal in the MCX natural gas futures contract from the high of ₹246.3 per mmBtu recorded on Monday has found support near ₹232. The immediate outlook is positive. A resistance is near current levels at ₹240.
A strong break above this hurdle can take the contract higher to ₹245 and ₹250 in the coming days. Traders with a short-term perspective can go long with a stop-loss at ₹228 for the target of ₹248.
The outlook for the MCX natural futures contract will turn negative if the contract falls below ₹230. In such a scenario, the contract can fall to ₹225 and then to ₹220 .
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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