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The crude oil futures contract (₹6,068 per barrel) has found good support in the ₹5,900-₹5,890 region. The contract made a low of ₹5,908 per barrel on Monday and rebounded on Tuesday. There is room for a near-term corrective bounce towards ₹6,200-₹6,300 in the coming sessions from here.
However, the region between ₹6,200-₹6,300 is a strong resistance and can cap the upside. As such the MCX crude oil futures contract is more likely to reverse lower from the ₹6,200-₹6,300 zone. That will keep intact the downtrend that has been in place since the last week of October. The pull-back from the ₹6,200-₹6,300 region can drag the contract lower to ₹5,900 again. That fall is more like to break below ₹5,900. Such a break will then pave way for a fresh fall to ₹5,700 initially and then even to ₹5,400 in the coming weeks. Positional traders can wait for a rise and go short at ₹6,180.
Accumulate shorts at ₹6,240. Stop-loss can be placed at ₹6,360. Trail the stop-loss down to ₹6,120 as soon as the contract moves down to ₹5,970. Move the stop-loss further lower to ₹5,860 as soon as the contract falls to ₹5,770.
Book profits at ₹5,720. The bearish outlook will be negated if the MCX-Crude Oil contract breaks above ₹6,300 decisively. Such a break can then bring back the bullish momentum and take the contract up to ₹6,700.
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