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Outlook is bullish for MCX-Crude oil

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The MCX-Crude oil futures contract has been on an intermediate-term uptrend since April last year when it recorded a low of ₹795 per barrel (BBL).

Medium-term trend has been up since its November low of ₹2,540 levels. In late November 2020, the contract surpassed a key resistance at ₹3,175 and continued to trend upwards.

After testing a key hurdle at ₹3,900 for three weeks in January, the contract eventually surpassed this level as well as the ₹4,000-mark in the past week by gaining 8.4 per cent with good volume.

This rally has strengthened both the intermediate as well as the medium term uptrends.

Gaining momentum, the contract has advanced 1.4 per cent on Monday. The daily relative strength index is likely to reach the overbought territory in the bullish zone and the weekly RSI features in the bullish zone.

The near-term bullish momentum will stay in place as long as the contract trades above the key base level of ₹3,900. The current rally can extend and test resistance at ₹4,300 and then at ₹4,400 levels.

That said, the contract has a significant long-term resistance at ₹4,500. Traders with a short-term view can go long on dips with a with a stop-loss ₹3,950 levels.

On the downside, an emphatic fall below the vital base level of ₹3,800 will bring back selling interest and drag the contract down to ₹3,600 in the short-term.

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

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