Crude oil seems to have resumed the upswing after consolidating over the past few weeks. Brent crude oil futures on the Intercontinental Exchange (ICE) appreciated 3.9 per cent by closing at $85.3 per barrel. Crude oil futures on the MCX was up 3.7 per cent by ending the week at ₹6,680 a barrel.

Brent futures ($85.3)

Brent futures, which has been charting a sideways trend since early February, broke out of the $81-84 range last week. Thus, the bulls seem to have regained traction and the probability of further rally is high.

We expect a quick rally to $90, a resistance. Above this level, there are barriers at $93 and $100.

Henceforth, $84 will act as a strong support. Below this, potential support levels are at $81 and $79. Notably, the 50-day moving average coincides at $81, making it a strong base.

MCX-Crude oil (₹6,680)

The March futures contract of crude oil regained bullish momentum and rallied last week. It made a higher high as it surpassed the resistance at ₹6,650. Since this contract expires on March 19, we will consider April series for analysis and trade recommendation.

The April contract bounced off the support at ₹6,350 and moved above the barrier at ₹6,600. From the current level, it is likely to get past the nearest resistance of ₹6,800 and hit ₹7,000 in the near term.

If there is a decline from here, ₹6,600 will act as a support. Below this level, ₹6,515 and ₹6,350 are the important supports. Only a breach of ₹6,350 will turn the trend bearish.

Trade strategy: We suggested buying March contract at ₹6,520, which closed at ₹6,720 last week. As the expiry is near by, traders can roll over to April futures.

That is, exit March longs now at ₹6,720 and buy April futures at ₹6,680. Place stop-loss at ₹6,480. When the contract rallies past ₹6,800, tighten the stop-loss to ₹6,650. Book profits at ₹6,950.

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