The crude oil futures contract traded on the Multi Commodity Exchange (MCX) tumbled about 6 per cent over the past week. It is currently trading near ₹4,960/barrel. A sharp fall in the global crude oil prices has dragged the MCX futures contract down.

The WTI crude oil ($80.5/barrel) has fallen below its important support at $83. The outlook is bearish and there is a strong possibility for it to decline further to $73.5.

Key resistances for the contract are at ₹5,200 and then at ₹5,270 – the 200-week moving average. As long as the contract trades below these levels a fall to ₹4,450 looks likely in the coming days.

Traders with a short-term perspective can initiate fresh short position at current levels. Stop-loss can be kept at ₹5,280 for the target of ₹4,450.

Any intermediate rally to ₹5,100 and ₹5,200 can be used as a good opportunity to accumulate more short positions.

MCX-natural gas: The MCX-natural gas futures contract traded in the range between ₹234 and ₹239 per mmBtu in the past week. The contract is currently poised near the upper end of this range at ₹238.

With muted trading action over the past week, the view remains the same as mentioned in this column last week. Key trend line support is at ₹231.85 which can cushion any immediate fall. A reversal from this level can take the contract higher to ₹250 levels. Investors can hold on to the long positions taken last week.

Retain the stop-loss at ₹229 for the same target of ₹245.

The outlook will turn negative if the contract declines below ₹231.85. The next targets will be ₹229 and ₹226.

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

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