Crude oil prices were up last week. The Brent crude oil futures on the Intercontinental Exchange (ICE) ($72.80/barrel) was up 0.9 per cent. Whereas the crude oil futures on the MCX (₹5,946/barrel) gained 0.8 per cent.
Brent futures ($72.80)
Brent crude oil futures extended the upside for the third week in a row. However, the price action shows that the momentum is slowing. While it is not a bearish indication, the contract might get into a consolidation phase if not witness a decline.
From the current level, the nearest resistance is at $75 with the subsequent one at $77. On the other hand, the nearest supports from the current level are $70.70 and $69. Note that a breach of the latter can lead to a fresh leg of downtrend.
MCX-Crude oil (₹5,946)
Last week, the April crude oil futures appeared like breaking out of the narrow range of ₹5,750-5,940, within which it has been trading in the preceding two weeks. However, it was unable to top the hurdle at ₹6,000.
That said, the price is above the 20-day moving average. Even so, we cannot be certain about a rally because of the barrier at ₹6,000. If this level is breached, crude oil futures can gradually move up to ₹6,500.
In case the contract drops, it can find support at ₹5,750. If the bears can pull the price below this base, we might see the decline extending to ₹5,500, a potential support. Support below ₹5,500 is at ₹5,000.
Trade strategy: Stay out as there are no clear indications with respect to the trend. Buy crude oil futures with a stop-loss at ₹5,800 if it breaks out of ₹6,000. Exit at ₹6,500.