Significant support at ₹2,900, provided base for the Crude Oil futures contract traded on the Multi Commodity Exchange (MCX) in early and mid-September. This support which also coincides with the 61.8 Fibonacci retracement level of the prior up move is a key trend-deciding level for the contract.

Last week, the contract managed to climb 3.2 per cent in the midst of volatility and closed at ₹2,978 a barrel. Immediate resistance at ₹3,100 limited the contract in early this week. But the immediate support as well as the 50-day moving average at around ₹2,980 was cushioning the contract’s fall this week.

After a choppy start, the contract gained momentum and it has surged almost 6 per cent so far this weeky. The contract has decisively breaching a key immediate resistance at ₹3,100 and trades at ₹3,156 levels. It hovers well above its 21 and 50-day moving averages. The WTI crude oil jumped more than 5 per cent on Wednesday and closed at $47 a barrel. Following this rally, the crude oil price witness a muted trade on Thursday and hovers at $46.8 levels. Immediate resistances are placed at $48 and $50. Supports are at $44.5 and $43.

Back to the domestic market, the short-term outlook for the MCX crude oil contract is bullish as the contract has decisively breached the immediate resistance at ₹3,100.

Both the daily and weekly price rate of change indicators are featuring in the positive territory implying buying interest. Traders with a short-term perspective can buy the contract with a stop-loss at ₹3,050.

Targets are ₹3,250 and ₹3,300. Next resistances are at ₹3,400 and ₹3,450. Significant supports to note are pegged at ₹3,000 and ₹2,900 levels.

Only an emphatic downward breakthrough of ₹2,900 will mar the medium-term uptrend and pull the contract down to ₹2,800 and then to ₹2,650.

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