Crude oil prices saw a decline over the past week. The Brent crude oil futures on the Intercontinental Exchange (ICE) lost 3.9 per cent and ended the week at $73.1 per barrel. Similarly, the crude oil futures on the MCX was down 0.9 per cent and it closed the week at ₹5,988 a barrel.

Brent futures ($73.1)

Brent Crude futures made a recovery after opening last week with a gap-down. But the strength of the rally was not enough to lift the price above the resistance at $75. Similarly, the selling pressure has been dodged well by the support at $70.

Essentially, the next leg of trend depends on which among $70 and $75 the contract breaches first.

A breakout of $75 can lift the contract to $80. But if the support at $70 is taken out, there is an immediate support at $68. A break below this can intensify the sell-off, potentially dragging the contract towards the $60-62 price band.

MCX-Crude oil (₹5,988)

The November crude oil futures declined in the first two sessions of last week. But it has rallied since Wednesday.

The contract has however fell short of crossing over the hurdle at ₹6,050. That said, the support at ₹5,630 has been holding well so far.

If crude oil futures surpass ₹6,050, it can see a quick rally to ₹6,450 whereas a decline from the current level can take the contract to ₹5,630. Below this level is another key support at ₹5,500.

Trade strategy: Since crude oil futures is now near a resistance, go short with a stop-loss at ₹6,130. Book profits at ₹5,630.

In case the stop-loss of above short trade is hit, it could mean the resistance at ₹6,050 is breached. In such a scenario, consider going long with a stop-loss at ₹5,880. Exit at ₹6,450.

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