Crude oil prices ended last week on a flat note after witnessing considerable volatility. The Brent crude oil futures on the Intercontinental Exchange (ICE) ended the week flat at $79.7 per barrel. The crude oil futures on the MCX was down by a marginal 0.1 per cent as it closed the week at ₹6,355 a barrel.

Brent futures ($79.7)

Brent Crude futures rallied early last week. However, it could not move up beyond the 50- and 200-day moving average resistance, which stood at $83. The contract declined for most of the week and closed at $79.7.

The nearest support from the current level is at $76. While there is a chance for the price to fall to this level, broadly, the price action indicates that Brent futures is heading for a consolidation phase.

The contract is likely to remain within $76 and $82 for a while. The direction of the break of this price band will lend us clues about the next leg of trend.

MCX-Crude oil (₹6,355)

The September crude oil futures surged and hit a high of ₹6,602 early last week. However, it was unable to get past the resistance at ₹6,600 and declined. By closing at ₹6,355 on Friday, the contract is now hovering around the 20-day moving average.

Going ahead, the crude oil futures might stay in the broad price band of ₹6,000-6,600 in the short term. So long as the contract trades within these levels, the path of the next leg of trend will remain uncertain.

In case the contract moves above ₹6,600, it can face resistance between ₹6,850 and ₹7,000. A breach of ₹7,000 can lead to a rally to ₹7,300. On the other hand, if the price slips below ₹6,000, it can decline to ₹5,850 and then possibly to ₹5,700. 

Trade strategy: The outlook is uncertain. We suggest staying out.

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