The commodity market was largely flat last week where most of the commodities moved on a flat note.

As a result, there was not much activity in the iCOMDEX, the composite index of the Multi Commodity Exchange (MCX), which ended the week marginally higher at 0.8 per cent.

Crude oil and gold, which constitute about half of the index weight, are in a consolidation phase and so the index will most likely move sideways until at least either of these commodities establish a trend.

MCX-Crude (₹3,155)

The September futures of crude oil on MCX continued its horizontal price action where it has been oscillating between ₹3,130 and ₹3,240 for the past two weeks. At a broader level, the contract is traversing between ₹3,000 and ₹3,240 for more than a month.

So, unless either of these levels are breached, the trend will remain uncertain.

The contract had rallied prior to the consolidation — that means if the contract fails to break out soon, the possibility of a bearish reversal will begin to weigh on the contract.

Nevertheless, until the price breaks either ₹3,000 or ₹3,240, traders can adopt a range-trading strategy. If the contract rallies past ₹3,240, it can rally to ₹3,300 and ₹3,360, whereas below ₹3000, the support levels are at ₹2,940 and ₹2,850.

MCX-Gold (₹52,016)

The October futures contract of gold on MCX began last week on a positive note where it rallied to register an intra-week high of ₹54,000 on Tuesday. But the contract reversed from that level and was gradually declining for the rest of the week, ending just above the support band of ₹51,310 and ₹51,800.

Consequently, the relative strength indicator in the daily chart has slipped below the midpoint level of 50, and the moving average convergence divergence indicator was in a downward trajectory. While these are hints of bears gaining traction, the contract is above the psychological support of ₹50,000 and until it remains so, the bulls stand a chance to turn the momentum in their favour.

The recent price action indicates that the contract can be held between ₹51,310 and ₹54,000.

So, traders can go with range-trading strategies until either of these levels are taken out.

MCX-Silver (₹67,067)

The September futures of silver on MCX, like the gold futures, began last week positively and rallied to mark an intra-week high of ₹71,350. However, it was unable to extend the rally and started to descend and ended the week at ₹67,067. As it can be observed in the daily chart, the contract is likely to be stuck within ₹65,000 and ₹71,350.

Despite the contract treading a sideways path, the moving average convergence divergence indicator in the daily chart is pointing downwards and the daily relative strength indicator is showing a fresh down-tick.

However, until the contract trades above ₹61,000, a bearish trend reversal cannot be confirmed. Since the price action in the daily chart is hinting at a horizontal trend, traders can follow a range-trading strategy until either ₹65,000 or ₹71,350 is invalidated.

MCX-Copper (₹518.8)

The August futures contract of copper on MCX, after consolidating for two weeks, broke out of the range last week. Therefore, it has formed a higher-high, indicating a bullish momentum. Notably, the contract registered an intra-week high of ₹534.4 before ending the week at ₹518.8.

Following the recent rally, the daily relative strength indicator, which was moving down gradually, is now showing a fresh up-tick. Supporting the positive bias, it lies above the midpoint level of 50.

The moving average convergence divergence indicator in the daily chart, which was charting a downward trajectory, is now attempting to turn upwards. Moreover, the price remains above the crucial support of ₹500.

Considering the above factors, traders can be bullish and go long on declines with a stop-loss at ₹500. On the upside, the contract is likely to retest ₹534 and can possibly rally to ₹545.

NCDEX-RM seed (₹5,210)

The September futures of RM seed (mustard seed) in the National Commodities and Derivatives Exchange (NCDEX) opened higher last week. The contract was trading with a bullish bias and inched up, ending the week at ₹5,210 versus the previous week’s close of ₹5,081.

The contract has been in a bull trend for the past couple of months — this is corroborated by the relative strength index and the moving average convergence divergence indicators in the daily chart, as they stay in their respective bullish zones.

The overall trend is upwards, and the contract has now moved above ₹5,200, opening the door for further strengthening.

Hence, traders can initiate fresh long positions with a stop-loss at ₹5,050. The contract is likely to head towards ₹5,300 in the forthcoming sessions.