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The recent rally in crude oil futures, that began in early November last year, kick started its journey from about ₹2,550. But, the futures contract started experiencing weakness in the upward momentum from mid-January this year and consequently, the price started to tread in a sideways trend largely moving between ₹3,800 and ₹3,940.
After two weeks of sluggishness, the contract looks to have regained traction as it broke out of the range on Tuesday. Also, it has closed above the key level of ₹4,000 and the breakout has also confirmed a bullish flag pattern, an indication of positive bias being built up.
Prices are expected to advance further and the contract is likely to rally to ₹4,150, which can be a hindrance for the bulls.
A breakout of this level can take the contract to ₹4,200. Notable supports from the current levels are at ₹4,000 and ₹3,900.
Traders can initiate fresh long positions in February contract on declines with stop-loss at ₹3,900.
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