Crude oil prices extended the gains last week. The Brent crude oil futures on the Intercontinental Exchange (ICE) went up 1 per cent and ended the week at $78.9 per barrel. Similarly, the crude oil futures on the MCX was up 0.4 per cent and it closed the week at ₹6,364 a barrel.
Brent futures ($78.9)
Brent Crude futures began the week on a strong foot and hit a high of $81.2 on Monday. However, it could not move up further and the price moderated.
Although the trend has not turned bearish, the chart shows that there is a strong resistance ahead at $82. For the contract to establish the next leg of the uptrend, it should breach this level. Resistance above $82 is at $88.
On the downside, there is a support at $75. As long as this level holds, Brent crude futures will retain the bullish bias. Support below $75 is at $72.
MCX-Crude oil (₹6,364)
The October crude oil futures rallied and hit a high of ₹6,495 last Monday. But unable to surpass the barrier at ₹6,500, the price moderated. Nevertheless, it stays above the support at ₹6,000.
The chart shows that crude oil futures is stuck within two key levels at ₹6,000 and ₹6,500. So, even though the contract exhibits a bullish bias now, it ought to breakout of ₹6,500 to see another upswing. Resistance above ₹6,500 are at ₹6,800 and ₹7,000.
In case the contract falls below the support at ₹6,000, it can drop to ₹5,600. However, the 20-day moving average coincides at ₹6,000, making it a strong base.
Trade strategy: The price action hints that the crude oil futures is likely to stay within ₹6,000 and ₹6,500 for some time. So, traders can refrain from taking fresh trades.