Crude oil prices dipped last week. Brent crude oil futures on the Intercontinental Exchange (ICE) slipped 1.7 per cent as it closed at $82.1 per barrel. Crude oil futures on the MCX was down 2.7 per cent by ending the week at ₹6,459 a barrel.

Brent futures ($82.1)

Although Brent futures declined last week, it remains within the range of $81-84. Until it stays so, the next swing in price will be uncertain.

If Brent futures regain traction and break out of $84, we could see a quick rise in price to $90, a resistance. Above this level, there are barriers at $93 and $100.

Alternatively, if the contract falls below the support level of $81, it could extend the decline 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 (₹6,459)

The March futures contract of crude oil broke out of the resistance at ₹6,520 early this month. But there was no follow-through rally since then. Last week, the contract dipped 2.7 per cent.

That said, the crude oil futures continue to trade above the important support at ₹6,300. The 50-day moving average coincides at this level, making it a strong base. So long as this level stays true, there will always be a bullish bias.

If the uptrend resumes, the contract can move up to ₹6,800, a barrier. A breach of this can take the contract to ₹7,000. On the other hand, if the contract breaks below the support at ₹6,300, the trend can turn bearish. Nearest support below ₹6,300 is at ₹6,000.

Trade strategy: Hold the longs initiated at ₹6,520 early this month. Maintain the stop-loss at ₹6,300. When the contract touches ₹6,800, tighten the stop-loss to ₹6,625. Book profits at ₹6,950.

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