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The outlook for both the crude oil and the natural gas futures contract traded on the Multi Commodity Exchange is unclear at the moment.
The MCX crude oil futures contract continues to trade within its sideway range between ₹3,600-₹4,000 a barrel. It is currently poised at the mid-point of this range at ₹3,850. It is more likely to move down further to test the supports at ₹3,750 and ₹3,700.
Short-term traders can stay out of the market at the moment and wait for the contract to decline. The level of ₹3,700 is a key trend-line support. If the contract reverses higher from this support, then traders can go long with a stop-loss at ₹3,620 for the target of ₹3,880.
A breakout on either side of ₹3,600 and ₹4,000 will decide the next trend for the contract. The bias on the charts is to see a bullish break above ₹4,000. A strong daily close above ₹3,950 will be the first sign for the contract to break above ₹4,000. Then, the next targets will be ₹4,250 and ₹4,500.
MCX-Natural Gas: The contract faces resistance at ₹190 per mmBtu. It has come off after recording a high of ₹189.80 on Wednesday. It is currently trading near ₹180. Further fall is possible. But series of key supports are placed at ₹175, ₹173 and ₹169 which could keep the pace of fall slow and also halt the decline. So, traders can stay out of the market until a clear trade signal emerges.
The outlook will turn positive only if the contract records a strong break and close above ₹190.
Such a break can take the contract higher to the next target of ₹200. In such a scenario, traders can go long at ₹192 with a tight ₹188 for the target of ₹198.
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