The crude oil futures contract traded on the Multi Commodity Exchange has reversed higher after recording a low of ₹5,968 a barrel on Tuesday.

This reversal keeps intact the broad ₹5,950-6,550 sideways range that has been in place since March.

As mentioned in this column couple of weeks ago, the 55-, 100- and 200-day moving averages are still flat suggesting that the sideways consolidation could continue.

So traders can initiate fresh long position in the contract with a stop-loss at ₹5,940 for the target of ₹6,400. Traders with high risk appetite can even accumulate long positions in an intermediate dip to ₹6,000 with the same stop-loss and hold for an increased profit level of ₹6,500.

MCX-natural gas: The MCX-natural gas futures contract has dropped breaking its ₹253-295 per mmBtu sideways range that was in place for more than four months. This fall has also marked a break of its long-term up trend that was in place since March 2012.

Though, technically the outlook has turned bearish now, lack of momentum after the break below ₹255 leaves a doubt on the fall to extend further immediately.

Also the US natural gas futures contract which is trading at $4.1 per mmBtu has a significant long-term support at $4. If it reverses higher from this level, then it could limit the downside in the MCX-natural gas.

So traders can avoid trading in this contract at the moment and wait to get a clear trade signal.

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

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