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MCX-Crude oil to cross ₹4,000

MCX-Crude oil to cross ₹4,000

 

The recovery in the futures price of crude oil, which began in April last year, slowed down in June and in the subsequent months, the price was tracing a rectangle pattern on the daily chart. That is, the contract was largely oscillating within ₹2,700 and ₹3,250. But in mid-November, it regained traction and broke out of the range.

Following this, the price has been steadily appreciating and as a result, the crude oil futures (February expiry) marked a fresh high of ₹3,958 last week. After a minor correction, where the contract inched down to ₹3,810, it has now moved back above the ₹3,900-mark.

The overall trend is positive, and the contract is likely to move northwards in the upcoming trading sessions. Supporting the bullish view, the daily relative strength index lies in the positive territory. The moving average convergence divergence indicator on the daily chart has been tracing an upward trajectory and remains in the bullish zone. Also, the price is well above the 21-day moving average (DMA), indicating good upward momentum.

From the current levels, the nearest resistance can be ₹4,000. A breach of this can intensify the rally, possibly lifting the contract to ₹4,050 and ₹4,100 in the near-term. But if the contract falls below the support of ₹3,800, the correction can be extended to ₹3,721 – its 21-DMA.

Traders can go long in MCX-Crude oil futures with stop-loss at ₹3,800.

 

This article is auto-generated by Algorithm Source: www.thehindubusinessline.com

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