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The uptrend in the crude oil prices remain intact. After a brief correction, the prices have risen sharply again since mid-June. The crude oil futures contract on the Multi Commodity Exchange (MCX) made a low of ₹4,334 per barrel on June 18 and has reversed sharply higher from there. The contract has surged a whopping 18 per cent from this low and is currently trading at ₹5,106.
Though the contract has been stuck in a narrow range over the last one week, the broader bullish outlook remains intact. Immediate support is at ₹4,950 and the next significant support is at ₹4,795. Intermediate dips may find fresh buying support and a fall below ₹4,795 looks unlikely.
Resistance is in the band between ₹5,150 and ₹5,200. A strong break above ₹5,200 will pave way for a fresh rally to ₹5,500 or ₹5,700 in the coming weeks.
Traders with a medium-term perspective can wait for dips and go long at ₹5,025 and at ₹4,985 levels. Stop-loss can be placed at ₹4,750 for the target of ₹5,500. Revise the stop-loss higher to ₹5,150 as soon as the contract moves up to ₹5,250.
Note: The recommendations are based on technical analysis and there is a risk of loss in trading.
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