Crude oil advanced in the first half of last week. But then it made a U-turn on Wednesday and declined. However, it managed to end the week higher.

Brent crude oil futures on the Intercontinental Exchange (ICE) was up 0.4 per cent by closing at $85.6 per barrel. Crude oil futures on the MCX was up 1 per cent by ending the week at ₹6,746 a barrel.

Brent futures ($85.6)

Brent futures marked a five-month high of $87.70 last Tuesday before scaling lower to $85.60. Yet, the broader trend is bullish, and it will remain so until $81-84 support band stays valid.

If the rally resumes, Brent futures can hit $90, a resistance, soon. Above this, $93 and $100 are the hurdles.

But if the contract slips below the support at $81, it can fall to $77 or even to $75.

MCX-Crude oil (₹6,746)

The April crude oil futures registered a high of ₹6,897 last Tuesday and then dropped. But the uptrend is intact, and the contract stays above few important supports.

There is a strong support at ₹6,600, where the 20-day moving average coincides. Below this, ₹6,500 and ₹6,420 can provide support if there is a fall in price. Only a break below ₹6,420 will turn the bias bearish.

In the near term, we expect crude oil futures rallying to ₹7,000, from where there could be a correction in price, possibly to ₹6,500. But if ₹7,000 is invalidated, expect an upswing towards ₹8,000 over the medium term.

Trade strategy: Last week, we recommended rolling over the longs from March futures (initiated at ₹6,720) to April contract at ₹6,680. Since the price crossed over ₹6,800 mid-week, the revised stop-loss would now be at ₹6,650. Retain this trade. Liquidate the longs at ₹6,950.