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Crude oil costs made some restoration final week after witnessing promoting stress within the previous few weeks. Brent crude oil futures on the Intercontinental Exchange (ICE) was up 1.6 per cent by closing at $84 per barrel. Crude oil futures on the MCX posted a achieve of 1.4 per cent by ending the week at ₹6,627 a barrel.
Brent Crude futures ($84)
Brent Crude futures stays throughout the vary of $81-84. Technically, until the contract strikes out of this value band, we can’t be sure in regards to the subsequent swing in value.
But the bias appears to be constructive and on the again of this, if the contract breaks out of $84, it might rally to $90, a resistance, rapidly. Next resistance is at $96.
On the opposite hand, if bears achieve traction and drag the contract under the assist at $81, the Brent futures may decline to $77. Note that the value area between $76-77 is a assist band.
MCX-Crude oil (₹6,627)
Crude oil futures (June expiry) has discovered robust assist at ₹6,450. The chart signifies shopping for at these ranges as the quantity has been wholesome because the contract superior within the second half of final week.
However, there’s a resistance at ₹6,670. If this degree is breached, the contract can set up a rally to ₹7,250. Note that ₹7,000 can act as a hurdle. Nevertheless, as soon as the contract breaks out of ₹6,670, it might collect sufficient momentum to surpass ₹7,000.
In case the contract falls from right here and slips under ₹6,450, the downswing will most certainly prolong to ₹6,000 and even to ₹5,850, that are the vital assist ranges.
Trade technique: A few weeks in the past, we advised shopping for May crude oil futures at a median value of ₹6,775. Since it expires on May 20, we suggest to roll-over the longs. That is, exit the longs in May contract and instantly purchase July futures, which is now at ₹6,627.
Stop-loss might be at ₹6,370. When the contract strikes above ₹6,670, tighten the stop-loss to ₹6,450. Once the contract touches ₹7,000, increase the stop-loss additional to ₹6,750. Book earnings at ₹7,250.
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