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The crude oil futures contract traded on the Multi Commodity Exchange (MCX) has surged in the past week breaching its key resistance at ₹3,100 per barrel. This rally marks a bullish breakout of a wedge pattern formed on the daily chart during September.
The contract recorded a high of ₹3,251 on Wednesday and has been retreating from there. It is currently trading at ₹3,135. The current pull back move of the contract is expected to extend to test a key support level at ₹3,050. This support can provide a base and the contract is likely to reverse higher from there once again. Such a reversal can take the contract higher to ₹3,250.
Traders can wait for dips and go long near ₹3,050. Stop-loss can be kept at ₹2,925 for the target of ₹3,250.
The 100-day moving average at ₹3,270 is a key resistance level. A strong break above this hurdle can take the contract higher to ₹3,400 and ₹3,450 there after.
MCX Natural Gas: The contract fell to a low of ₹159.5 per mmBtu on Monday and has been stuck inside a narrow range of ₹159 and ₹165 since then. The immediate outlook is not clear. Traders can stay out of the market at the moment. However, the overall trend is down. A strong break below ₹159 can drag the contract lower to ₹155 or even lower in the coming days.
Resistance is in ₹165-167 zone. The downside pressure will ease if the contract breaks above ₹167. Such a break can take it higher to ₹170 and ₹172.
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