Crude oil prices gained last week on the back of a demand zone. The Brent crude oil futures on the Intercontinental Exchange (ICE) gained 3.5 per cent and ended the week at $79.8 per barrel. Similarly, the crude oil futures on the MCX was up 4.8 per cent, as it closed the week at ₹6,444 a barrel.

Brent futures ($79.8)

Brent Crude futures snapped four weeks of decline by appreciating 3.5 per cent last week. It rallied after finding support at $75. However, it now faces a resistance at $81.

If the contract, on the back of the prevailing momentum, goes above $81, it can extend the upswing to $84. A breakout of this can lift the contract to $86, a resistance.

On the other hand, if the contract declines from here, it can retest $75. Support below this level is $70.

MCX-Crude oil (₹6,444)

The August crude oil futures found support at ₹6,100 and rebounded. The 20-day moving average lies at ₹6,500, its nearest resistance. A falling trendline and the 50 per cent Fibonacci retracement level of the prior downtrend also coincides at this level, making it a tough hurdle for the bulls to break.

If crude oil futures breach ₹6,500, it can surpass a minor resistance at ₹6,580 and move up to ₹6,850. Note that the price band of ₹6,850-7,000 is a resistance zone.

On the other hand, if the contract falls off the resistance at ₹6,500, it can retest ₹6,100. The downswing could extend to ₹6,000. Next support is at ₹5,800.

Trade strategy: Since there is a resistance at ₹6,500, traders can go short now with a stop-loss at ₹6,600. Exit at ₹6,100.

If the above stop-loss is hit, consider going long with a stop-loss at ₹6,450. Liquidate the trade at ₹6,850.

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