The crude oil futures contract traded on the Multi Commodity Exchange (MCX) has reversed higher from its low of ₹5,526/barrel recorded on September 11.
The contract has been in a strong downtrend since June. But the price action over the last two weeks, is signalling a reversal.
The contract is currently trading near ₹5,750 levels. Resistance is at ₹5,800. A strong break above this level will confirm the trend reversal. The ensuing targets on such a break are ₹5,930 and ₹6,000.
Traders can go long if the contract breaches ₹5,800 – the probability of which is high – with a stop-loss at ₹5,740 for the target of ₹5,920.
Support for the contract is at ₹5,700.
On the other hand, inability to breach ₹5,800 can keep the contract under pressure and take it lower to ₹5,650 and ₹5,550.
MCX-natural gas: The MCX-natural gas futures contract has risen sharply after recording a low of ₹230.9 per mmBtu last Friday.
The contract has been trading in a sideways range between ₹225 and ₹249 since July. It is currently heading towards the upper end of this range and is now trading near ₹243.
The resistance at ₹249 is likely to be tested in the coming days. A reversal from this level, however, will keep the sideways movement intact and drag the contract lower to ₹240 and ₹230.
Traders can go short if the contract reverses lower from ₹249. Stop-loss can placed at ₹252 for the target of ₹240.
The outlook for MCX-natural gas futures contract will turn bullish only on a strong break above ₹249. The next target will be ₹257.
Note: The recommendations are based on technical analysis. There is a risk of loss in trading.
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