The short-term outlook for the crude oil futures contract traded on the Multi Commodity Exchange (MCX) has turned bearish. The contract has broken the ₹3,700-4,000 per barrel sideways range on the downside. It is currently trading at ₹3,685. Key resistances are at ₹3,720 and then at ₹3,800. As long as the contract trades below these hurdles, there is a strong likelihood for it to witness a corrective fall in the coming days. The next support for the contract is at ₹3,475 – the 38.2 per cent Fibonacci retracement level which is likely to be tested now. A break below this support level can drag the contract to the targets of ₹3,400 or even ₹3,350 in the short-term.
Traders can go short. Stop-loss can be kept at ₹3,820 for the target of ₹3,520. Intermediate bounce to ₹3,800 can be used to accumulate short positions.
MCX-Natural gas: The reversal from the high of ₹188 per mmBtu recorded on Wednesday is negative for the contract. It suggests lack of further buying interest for the contract. It is currently trading at ₹181. A fall to ₹177 – the 50 per cent Fibonacci retracement support level is possible in the coming days. The price action on the chart suggests that this support is likely to be breached. Such a break can drag the contract further lower to ₹174 and ₹172 there after.
Short-term traders with high-risk appetite can go short at current levels. Stop-loss can be placed at ₹184 for the target of ₹175.
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