Crude oil prices ended lower last week. Brent crude oil futures on the Intercontinental Exchange (ICE) was down 1 per cent by closing at $81.3 per barrel, whereas crude oil futures on the MCX posted a minor loss of 0.3 per cent by ending the week at ₹6,453 a barrel.

Brent futures ($81.3)

Brent Crude futures rallied to mark an intraweek high of $85 mid-week. However, after trading briefly above the resistance at $84, the contract fell sharply.

By closing at $81.3, the contract is now testing the lower boundary of the $81-84 range within which it has been trading over the past month.

So, technically, the path of the next trend depends on the direction of the break of the above-mentioned range. A breakout of $84 can lift Brent futures to $87 and then potentially to $90. Subsequent resistance is at $96.

But if the contract decisively breaks below $81, it can quickly drop to $79. Immediate support below $79 is at $76.

MCX-Crude oil (₹6,453)

Crude oil futures (June expiry) marked an intraweek high of ₹6,728 on Wednesday. However, the contract quickly made a U-turn and witnessed a swift price fall.

As it stands, the range of ₹6,400-6,650 holds true and there are no definite signs about the next swing in price.

If the contract manages to gather bullish momentum and surpasses ₹6,650, it can rally to ₹7,000, a barrier. Subsequent resistance is at ₹7,250.

On the other hand, if crude oil futures slip below the support at ₹6,400, the price might fall quickly to ₹6,000, an important base. A breach of this might change the medium-term trend bearish. Notable support below ₹6,000 is at ₹5,550.

Trade strategy: The next leg of trend depends on the direction of the break of above-mentioned range. Buy crude oil futures if it breaks out of ₹6,650. Keep stop-loss at ₹6,500. Book profits at ₹7,000.

In case the contract drops below ₹6,400, initiate short with a stop-loss at ₹6,600. Exit at ₹6,000.

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