Commodity Calls

Crude oil facing a crucial resistance band

Akhil Nallamuthu BL Research Bureau | Updated on February 23, 2021 Published on February 23, 2021

While crude oil has been rising relentlessly, gold has been under pressure with the rates falling to a three-month low istock.com

The rally in futures of crude oil, that began in November last year, does not seem to have lost strength as the momentum continues to be strong. Even a small price correction seems to be bought into. The March futures contract of crude on the Multi Commodity Exchange (MCX), which saw a minor correction towards the end of the last week, seems to have realigned with the uptrend since the price has been moving up since opening if the current week. Notably, the futures marked a fresh 52-week high of ₹4,566 on Tuesday.

 

Supporting the bullish view, the daily relative strength index is showing a fresh uptick and the moving average convergence divergence indicator on the daily chart stays in the positive territory. Moreover, the global price trend is substantiating the same as the spot price of Brent crude has surpassed the resistance of $65.

However, the price band of ₹4,600 and ₹4,670 can be a hurdle. Hence, fresh longs can be initiated above ₹4,670. Until then, traders can stay on the fence and those already holding longs exiting at current levels and re-enter above ₹4,670.

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Published on February 23, 2021
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