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The crude oil futures contract traded on the Multi Commodity Exchange (MCX) tumbled to a low of ₹3,982 per barrel on Monday. The contract has recovered from this low and has been trading in a narrow range between ₹4,150 and ₹4,300 since Tuesday. A very important long-term support is available for the contract at ₹3,978 which is a 61.8 per cent Fibonacci retracement level. Though the price action on the charts suggest that this support can be tested once again in the coming days, a break below this level looks unlikely. A reversal from this level can take the contract higher to ₹4,400 or even ₹4,500. Having said this, traders with a short-term perspective can go long in the MCX-crude oil futures contract at current levels. Stop-loss can be placed at ₹3,930 for the target of ₹4,350.
The contract will come under fresh selling pressure if it declines below ₹3,978. The next target will be ₹3,735.
MCX-Natural gas
The MCX-natural gas futures contract has broken its sideways range between ₹243-281 per mmBtu on the downside in the past week. It is currently trading near its next important support at ₹235. The outlook is bearish and so there is a strong likelihood of break and fall below ₹235 towards ₹230 and ₹225 in the coming days.
On the other hand if the contract reverses higher from current levels then a rise to ₹241 – the next key resistance is possible. However, an immediate break above ₹241 looks unlikely and the contract is expected remain under pressure.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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