The Crude oil futures contract traded on the Multi Commodity Exchange (MCX) has been moving in a sideways range between ₹3,700 and ₹4,000 a barrel for about three weeks.

The contract tested the lower end of this range and recorded a low of ₹3,725 on Wednesday.

It thenreversed higher from this low thereby keeping the range bound movement intact.

It is currently trading near ₹3,820. There is a strong likelihood for a rise to ₹3,925 – an intermediate resistance for the contract.

A break above this hurdle can take it further higher to ₹4,000 – the upper end of the range in the coming days.

Traders can go long at current levels. Stop-loss can be placed at ₹3,760 for the target of ₹3,920. A breakout on either side of ₹3,700-4,000 will decide the next leg of move for the contract. A strong break above ₹4,000 will be bullish for the target of ₹4,150.

On the other hand, a fall below ₹3,700 will increase the danger of a fall to ₹3,500.

MCX-Natural Gas

The MCX-Natural Gas futures contract has reversed sharply lower after recording a high of ₹198.3 per mmBtu on Tuesday.

It is currently trading near ₹188. This pull back move extending further to ₹180 cannot be ruled out. But there are series of supports ahead which can slow down the pace of the fall from current levels. Key supports are at ₹185, ₹182 and ₹180.

A reversal from ₹180 can take the contract higher to ₹200 levels once again.

Traders can use such a reversal to go long with a tight stop-loss at ₹177 for the target of ₹192.

On the other hand, the downside pressure will increase if the contract declines below ₹180.

The targets will be ₹174 and ₹172.

(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)

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