Crude oil prices bounced back strongly last week after tumbling in the preceding week. Brent crude oil futures on the Intercontinental Exchange (ICE) rallied 6.3 per cent as it closed at $82.2 per barrel. Crude oil futures on the MCX advanced 5.5 per cent by ending the week at ₹6,361 a barrel.

Brent futures ($82.2)

Brent futures rebounded last week and reclaimed $80-mark. It has also closed marginally above the 200-day moving average, which is now at $81.70.

Although there are no signs of a bearish reversal, the contract is heading towards the resistance band of $83-84, which could put a cap on the upside. A breach of this will open the door for a rally to $90.

On the other hand, if there is a fall off the above-mentioned barrier, it can run down to $80, a support. Below this, there are supports at $78 and $75.

MCX-Crude oil (₹6,361)

The February futures contract of crude oil moved up on the back of the support band of ₹5,780-5,900. Also, a rising trendline support helped crude oil bulls in the recovery.

Besides, the price action since mid-December shows the contract forming higher lows and higher highs, a positive sign.

We expect the contract to extend the uptrend in the coming days and touch ₹6,500. A breakout of this can lift the price to ₹6,800.

In case there is a fall from here, it can find support at ₹6,170. Below this, there is the trendline, which can offer support around ₹6,050. A fall below this level is less likely.

Trade strategy: Retain the buy in February futures initiated at ₹6,030. But revise the stop-loss from ₹5,750 to ₹6,150 so that a part of profit is protected.

Carry this trade until expiry of the running contract, which is on February 16 - Friday, if neither target nor stop-loss is triggered.