Crude oil prices slumped last week after seeing a sharply rally in the preceding week. Brent crude oil futures on the Intercontinental Exchange (ICE) tumbled 7.8 per cent as it closed at $77.3 per barrel. Crude oil futures on the MCX lost 5.5 per cent by ending the week at ₹6,030 a barrel.

Brent futures ($77.3)

Brent futures fell through the past week. It has slipped below a rising trendline support and also has closed below both 20- and 50-day moving averages, a sign of weakness.

However, there is immediate support at $75. Only a break below this level will be bearish. Until then, the bulls have a chance to make a comeback. Support below $75 is at $72.

On the other hand, if Brent crude futures bounce back, it will face resistance at $80 and $84. A rally past $84 can open the door for further upside to $90.

MCX-Crude oil (₹6,030)

The February futures contract of crude oil looked to continue the rally in the first couple of sessions of the last week. However, there was an abrupt change in the direction of movement.

The contract slipped below the support at ₹6,170 where both 20- and 50-day moving averages coincide.

But it remains above the important support region between ₹5,900 and ₹5,780. Also, the crude oil futures now lie just above a trendline support.

If there is a rebound, which can lift the contract above ₹6,170, we are likely to see an upswing to ₹6,350 or even to ₹6,500. Resistance above ₹6,500 is at ₹6,800.

The trend will turn bearish again if the contract falls below ₹5,780. In this case, the price could drop to ₹5,500.

Trade strategy: Buy crude oil futures at the current level of around ₹6,030. Target and stop-loss can be at ₹6,500 and ₹5,750.