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The crude oil futures contract traded on the Multi Commodity Exchange (MCX) added ₹36 or 1 per cent to trade at ₹3,364 per barrel on Thursday, tracking the WTI Crude Oil (Nymex) price that had advanced 1.3 per cent to $50.18 on that day. Last week, the crude oil surged 4.8 per cent to settle at $48.4. Extending this bullish momentum, the oil price is now testing a key resistance at $50. The daily relative strength index is hovering in the overbought territory implying the possibility of a near-term corrective fall. Such decline can find support at $48 or $46 in the coming week. But, an emphatic breakthrough of $50 can accelerate the price higher to $54 in the short term with a minor pause at around $52. The medium-term uptrend will be in place as long as the WTI Crude Oil trades above the key support level of $38.
On the domestic front, the MCX contract tests a key resistances at ₹3,300. A decisive break-out of this hurdle can pave way for an up move to ₹3,500 or even higher to ₹3,700 in the coming weeks. Traders with a short-term view can initiate long position if the current rally continues above ₹3,300 with a stop-loss at ₹3,175. Corrective decline can find support at ₹3,200 and ₹3,100 in the near term. Only a strong tumble below the key support level of ₹2,800 will mar the short-term uptrend. Medium-term trend is also up.
Note: The recommendations are based on technical analysis. There is a risk of loss in trading.
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