Commodities

Downside is limited for MCX-Crude Oil

Gurumurthy K BL Research Bureau | Updated on January 23, 2018 Published on April 09, 2015

Gas tankers wait to fill up at the Sun Federal loading facility in Philadelphia, Pennsylvania December 4, 2014. Brent crude oil fell below $69 a barrel on Thursday after Saudi Arabia announced deep cuts in selling prices for Asian and U.S. buyers, a week after refusing to support OPEC output cuts. REUTERS/Tom Mihalek (UNITED STATES - Tags: ENERGY BUSINESS)   -  Reuters





The Crude Oil futures contract traded on the Multi Commodity Exchange (MCX) has been retreating after testing its 100-day moving average resistance earlier this week. The contract recorded a high of ₹3,365/barrel on Tuesday and has come off to the current levels of ₹3,212. However, there is no threat for the short-term up trend that has been in place since March. Immediate support is at ₹3,200. Subsequent key supports are at ₹3,135 and ₹3,100. Declines to these supports are expected to attract fresh buying interest entering into the market. Significant resistance is at ₹3,380. A strong break above this level can take the contract higher to ₹3,500.

Short-term traders can initiate fresh long positions. Stop-loss can be placed at ₹3,055 for the target of ₹3,450.

The downside pressure will increase if the contract declines below ₹3,100. Such a break can drag it down to ₹3,000 where the 21-day moving average support is also poised.

MCX-Natural gas: The contract is stuck inside a narrow range between ₹162 and ₹170 per mmBtu for the second week. Currently the contract is poised near the lower end of this range at ₹164. The immediate outlook is not clear. Traders can stay on the sidelines until a clear trade signal emerges.

A breakout on either side of ₹162-170 will decide the next trend for the contract. A break above ₹170 will be bullish for the targets of ₹175 and ₹180. On the other hand, the downside pressure will increase on a break below ₹162 and drag it to ₹150 there after.

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

Published on April 09, 2015
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