Crude oil futures contract traded on the Multi Commodity Exchange (MCX) jumped more than 4 per cent on the back of strong buying interest on Monday, to settle at ₹3,328 per barrel. This rally has erased the prior bearish outlook on the contract. It took support at around ₹3,133 on June 17 and started to trend upwards. Further, breaching the key immediate resistance at ₹3,300, the contract continued its up move.
On Thursday, it surged ₹63 or 1.9 per cent to trade at ₹3,357. However, the contract tests a significant resistance at ₹3,400. Conclusive breakthrough of this resistance is required to strengthen the medium-term uptrend and take the contract northwards to ₹3,500 and ₹3,670 levels.
Inability to move beyond ₹3,400 will keep the contract in a sideways band between ₹3,130 and ₹3,400. Traders with a short-term horizon should tread with caution as long as the contract moves in this range. Strong break above ₹3,400 will imply resumption of the uptrend and traders can initiate long positions while maintaining a stop-loss at ₹3,300 . On the other hand, if the contract slumps below ₹3,130 it can find support at ₹3,050. Only a decisive fall below ₹3,050 will alter the short-term uptrend and pull the contract down to ₹2,900 levels. Next supports are at ₹2,800 and ₹2,600.
On the global front, WTI Crude Oil found support at $46 a barrel and reversed higher last week. On Thursday, the crude oil price climbed $0.77 to $49.9. The price currently tests a key resistance at $50. Strong rally can take it to $52 and $54 levels. Supports are pegged at $48 and $46.
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