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Gurumurthy K BL Research Bureau
The Crude Oil Futures contract on the Multi Commodity Exchange (MCX) has been in a strong uptrend since the beginning of December. The contract has surged about 30 per cent from the December low of ₹4,706 per barrel. It is currently trading at ₹6,115 per barrel.
The contract can rise to test the previous high of ₹6,428 in the near term. A rise past ₹6,428 will then pave the way for a further rise to ₹6,950-₹7,000 in the coming weeks. Immediate support is at ₹5,950. Slightly deeper support is at ₹5,700. The chances are high for the contract to sustain above ₹5,950 in the coming days.
Traders with a short-term perspective can go long at current levels. Accumulate longs on dips at ₹6,015. Keep the stop-loss at ₹5,750. Trail the stop-loss up to ₹6,150 as soon as the contract moves up to ₹6,275. Move the stop-loss further up to ₹6,385 as soon as the contract rises to ₹6,525. Exit the longs at ₹6,700.
The bullish outlook will come under threat only if the contract breaks below ₹5,700. Such a break can drag the MCX-Crude Oil futures contract down to ₹5,600 initially and then further lower eventually. However, a fall below ₹5,700 is unlikely as the current uptrend looks strong. As such, any intermediate pull-back move is likely to get fresh buying interest coming into the market and limit the downside.
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