Crude oil prices skyrocketed last week. The Brent crude oil futures on the Intercontinental Exchange (ICE) surged 9.2 per cent and ended the week at $78.1 per barrel. Similarly, the crude oil futures on the MCX soared 11.3 per cent and it closed the week at ₹6,339 a barrel.
Brent futures ($78.1)
Brent Crude futures witnessed a strong rally last week. It went past the hurdle at $75 and marked an intraweek high of $79.3 on Friday before closing the session at $78.1.
The price action shows good positive momentum and so, the probability of a rally is high. The nearest resistance is the price band of $80-82. A breakout of $82 can intensify the rally, possibly lifting the contract to $87 or $90.
In case there is a decline, Brent Crude futures can find support at $75. Subsequent support is at $72. A decline below the latter is less likely.
MCX-Crude oil (₹6,339)
The October crude oil futures broke out of the key resistance at ₹6,000 last week. It marked an intraweek high of ₹6,360 on Friday before ending the day at ₹6,339. A close near the high indicates good momentum.
Notably, the contract moved above a trendline resistance, and the price is now above both 20- and 50-day moving averages (DMAs), which are now at ₹5,840 and ₹6,060 respectively.
The nearest resistance is at ₹6,500. A breach of this can lead to another leg of rally, which can lift the contract to ₹6,800 and potentially to ₹7,000.
If the contract sees a fall, it can be arrested by the support at ₹6,000 or ₹5,840. That said, the chart looks upbeat, and the likelihood of a rally is high.
Trade strategy: We suggested going long on crude futures at ₹5,694 last week. Retain this trade but move the stop-loss up from ₹5,420 to ₹6,080. Book profits at ₹6,500.
