The futures contract of crude oil on the Multi Commodity Exchange (MCX) seems to be turning positive as there is a likely shift in momentum to the upside. In fact, the major trend remains bullish and the fall in price which occurred in mid-March seems to be a minor correction.

The uptrend, that began from in November last year, took the futures from about ₹2,600 to almost a high of ₹5,000. That is, the current expiry contract marked a high of ₹4,985 in the first week of March this year. However, the trend reversed wherein the contract witnessed a moderation in price. But the downside was limited as the contract found support at around ₹4,250.

Following this, the contract started to chart a sideways trend. While the price band of ₹4,220 and ₹4,250 acted as a strong base, the price level at ₹4,540 has been acting as a roadblock preventing the bulls from re-establishing the uptrend.

 

However, the overall trend is bullish and the price is now above 21- day moving average.

Given the above conditions, one can wait for now and take fresh buy positions if the contract closes above ₹4,540 on daily chart. Stop-loss can be at ₹4,360. A breakout of ₹4,540 can lift the contract to ₹4,725 and ₹4,850.

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