Crude oil prices witnessed a good amount of volatility last week but ended with a loss. Brent crude oil futures on the Intercontinental Exchange (ICE) was down 2.3 per cent as it closed at $81.6 per barrel. Crude oil futures on the MCX lost 2 per cent by ending the week at ₹6,353 a barrel.

Brent futures ($81.6)

Brent futures saw a zig zag movement last week and ended with a loss. But the uptrend is not invalidated although it seems to have lost the momentum.

The chart shows that Brent futures is now stuck in the range of $81-84. If the contract breaks out of $84, it could witness another leg of uptrend, possibly to $90, a resistance. Subsequent resistance levels are at $93 and $100.

But if the contract slips below $81, it could extend the downswing to $79. Most probably, there will be a bounce off this level. However, if $79 is invalidated, Brent futures could see a dip to $73.

MCX-Crude oil (₹6,353)

The March futures contract of crude oil attempted to surpass the barrier at ₹6,520 last week. However, it was unable to as sellers prevented a rally and led to a weekly loss.

That said, the trend did not turn bearish. The price action implies a potential consolidation between ₹6,300 and ₹6,520.

If the bulls regain traction and lift crude oil futures above ₹6,520, we will most likely see another leg of an upswing, possibly to ₹7,000, a barrier. Immediately above this is another resistance at ₹7,200. Note that ₹6,800 is a minor hurdle.

In case the contract slips below ₹6,300, there could be a decline to ₹6,100 and then possibly to ₹6,000. A fall below ₹6,000 is less likely.

Trade strategy: Buy crude oil futures if it breaks out of ₹6,520. Place initial stop-loss at ₹6,300. When the contract touches ₹6,800, tighten the stop-loss to ₹6,625. Book profits at ₹6,950.