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In November 2020, the continuous contract of crude oil on the Multi Commodity Exchange (MCX) bounced after finding support at ₹2,540. Since then, the contract has been on a strong uptrend. While there was a bit of a slowdown in March this year after reaching ₹4,960 levels, the contract regained momentum and crossed over the critical level of ₹5,000 in June.
It made a fresh high of ₹5,733 during the first week of July. However, the futures started to lose momentum and slipped below ₹5,000-mark. Nevertheless, the futures again tried to move up. But after reaching ₹5,500 levels, the contract quickly made a U-turn, and is now below both 21- and 50-day moving averages, a bearish signal.
Traders can short crude oil futures with stop-loss at ₹5,330 for a potential target of ₹4,885.
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