The crude oil futures contract traded on the Multi Commodity Exchange has dropped over 3 per cent from its high of ₹6,273/barrel recorded on June 21. The 21-day moving average at ₹6,155 is posing a resistance to the rally in the contract.

The probability looks high for the contract to dip further to test ₹6,000 and ₹5,950 in the coming days. However, the broader ₹5,950-6,550 range still remains intact. There is no downside threat for the contract unless ₹5,950 is broken. Also price action on the chart since March suggests that an intermediate fall to revisit ₹5,950 support level is a common recurrence within the range before the contract rallies to test ₹6,550 – the upper end of the range. So traders with a medium-term perspective can continue to hold their long position with the same stop-loss at ₹5,940 and for the target of ₹6.400. Also a reversal from ₹6,000 or ₹5,950 can be considered accumulating more long positions.

MCX-natural gas: The MCX-natural gas futures contract has taken a pause and is consolidating within its overall down trend. Resistance is at ₹238 per mmBtu and support is at ₹227. An immediate breach of ₹238 looks less probable. So traders who have taken short position last week can continue to hold it. Retain the stop-loss at ₹242. Partial profits can be booked at ₹218 and the rest can be squared off at ₹200. Intermediate rallies to ₹238 can be used to accumulate more shorts. A break below ₹227 will result in the downtrend extending towards ₹218 initially and then to ₹200 there after.

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

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