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The MCX-Crude oil futures contract has been stuck in a narrow sideways range of ₹3,500 for more than two months now. The contract is stuck between ₹3,450 and ₹3,700. A breakout on either side of this range will decide the next trend. A dip to ₹3,500 or ₹3,450 — the lower end of the range — is possible in the near term. The 21-week moving average as well as a trendline support, both poised at around ₹3,450 implies higher possibility of the contract sustaining above ₹3,450. A reversal from ₹3,450 can take the contract higher to ₹3,600 and ₹3,700 once again. A strong break and a decisive weekly close above ₹3,700 will give the initial sign of the range breakout. Such a break can boost the bullish momentum and trigger a fresh rally, targeting ₹4,000 or even higher levels thereafter. On the other hand, if the crude oil contract breaks the range below ₹3,450 in the coming days, it may come under pressure. Such a break can take the contract lower to ₹3,300. Further break below ₹3,300 will increase the likelihood of the fall extending to ₹3,200, going forward.
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