The outlook for the crude oil futures contract traded on the Multi Commodity Exchange (MCX) is turning bullish. The contract has surged about 20 per cent in the past week.

A 14 per cent rally from about $44-50 a barrel in the WTI Crude oil price coupled with a weak rupee has pushed the MCX futures contract price higher. The contract is currently trading near ₹3,250. Resistance is at ₹3,330.

A strong break above it can take the contract higher to ₹3,490 – the 100-day moving average level. But a reversal from ₹3,330 can pull the contract lower to ₹3,100 or even ₹3,000 levels.

However, the price action on the chart suggests that there is no immediate danger of the contract declining below ₹3,000. Having said this, there is a strong likelihood of a rally to ₹3,490 in the coming days.

Traders can go long. Stop-loss can be placed at ₹3,075 for the target of ₹3,450. Intermediate declines to ₹3,100 can be considered to accumulate more longs.

MCX-Natural Gas: The MCX-Natural gas futures contract is range bound between ₹168 and ₹175 this week. The contract is currently poised near the lower end of this range at ₹170. The immediate outlook is not clear.

A breakout on either side of this range will decide the next leg of move for the contract. A break below ₹168 can drag it to ₹165 initially and then to ₹160 thereafter.

On the other hand, a reversal from ₹168 will keep the sideways range intact and push the contract higher to ₹175.

Traders can stay out of the market until a clear trend emerges.

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

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