Comments
BL Research Bureau
The price of crude oil, which saw a considerable fall in November, has been on recovery since the beginning of December. Thus, the January futures contract of the energy commodity on the Multi Commodity Exchange (MCX), has been rallying since marking a low of ₹4,710 in early December. While ₹5,540 acted as a strong resistance over the past couple of weeks, the contract breached this level on Monday, turning the outlook positive.
Corroborating the positive inclination, the relative strength index (RSI) and the moving average convergence divergence (MACD) on the daily chart indicates bullishness. Nevertheless, the contract could be moderated and retest the resistance-turned-support of ₹5,540.
Considering the above factors, traders can go long at the current level and accumulate more on a drop to ₹5,540. Place initial stop-loss at ₹5,390. On the upside, resistance levels can be spotted at ₹5,850 and ₹6,000. Subsequently, ₹6,200 can be a hurdle. Hence, when the contract rallies past ₹5,850, shift the stop-loss to ₹5,650. When the contract touches ₹6,000, liquidate 50 per cent of the positions and revise the stop-loss gain to ₹5,800. Exit the remaining longs when the contract rises to ₹6,200.
On the other hand, contrary to our expectations, if the contract slips below the support at ₹5,540, it can find subsequent supports at ₹5,400 and ₹5,300.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.