Crude Oil may weaken below Rs 6,340; key support for Natural Gas at Rs 333

On the downside, MCX Crude Oil January futures could slide to Rs 5,940 or even re-test the recent lows at Rs 5,850-level; Natural Gas seems on course to test Rs 290 level.

The MCX Crude Oil futures once back declined after facing resistance around the 50-WMA, which is now placed at Rs 6,660. On the downside, break and sustained trade below Rs 6,340 can trigger a sharper fall. The key weekly support for MCX Natural Gas futures stand at Rs 333.

Crude Oil

Bias: Negative

Last close: Rs 6,478

Target: Rs 5,940; Rs 5,850; Rs 4,920

Support: Rs 6,340

Resistance: Rs 6,660; Rs 6,850

On Tuesday, for the third time in the last seven trading sessions the MCX Crude Oil futures retraced after facing resistance around the 50-DMA (Daily Moving Average), indicating persistent selling pressure by bears at higher levels.

The 50-DMA resistance now stands at Rs 6,660, above which the other major hurdles are placed at Rs 6,820 and Rs 6,850 in the form of higher-end of the Bollinger Bands on the daily chart, and the 100-DMA.

On the downside, the 20-DMA had been providing support for the Crude Oil prices since December 21, 2022. The same now stands at Rs 6,380. Break and sustained trade below the 20-DMA is likely to given fresh impetus to the crawling bears.

In case of sustained weakness, the MCX Crude Oil prices could drift towards the lower-end of the Bollinger Band on the daily chart at Rs 5,940-odd level, or re-test its December lows at Rs 5,850. The weekly chart hints that trade below Rs 5,850-level could trigger a fall towards the 200-WMA (Weekly Moving Average) indicating a downside target of Rs 4,920.

Among the key momentum oscillators on the daily chart, the MACD (Moving Average Convergence-Divergence) continues to show signs of exhaustion, while the Slow Stochastic is also marginally in favour of a downside.

According to the weekly Fibonacci chart, the MCX Crude Oil January futures have near supports at Rs 6,380 and Rs 6,340, below the bias for the week shall turn bearish. On the upside, Crude Oil futures need to sustain above Rs 6,480, for a pullback rally to emerge this week. 

On Wednesday, as per the daily Fibonacci chart, the MCX Crude Oil January contract may seek support around Rs 6,350 - Rs 6,315 - Rs 6,275. On the upside, the Crude Oil futures are likely to face resistance around Rs 6,550 - Rs 6,600 - Rs 6,680. 

Natural Gas

Bias: Negative

Last close: Rs 334.90

Target: Rs 290

Support: Rs 333

Resistance: Rs 362

The MCX Natural Gas futures have witnessed a steep fall of over 42 per cent in the last fortnight or so, and are now within striking distance of its anticipated downside target at Rs 290 - its 200-WMA.

The momentum continues to remain in favour of the bears. Further, soon there will be a bearish crossover on the weekly chart, with the 20-WMA (Weekly Moving Average) at Rs 531 now on the verge of dropping below the 50-WMA at Rs 523. The monthly chart indicates downside target of Rs 285 and Rs 240.

According to the weekly Fibonacci chart, the MCX Natural Gas January futures were seen testing support at the weekly S3 at Rs 333, below which the bias for the remainder of the week shall turn bearish. On the upside, a pullback to Rs 362 level cannot be ruled out.

On Wednesday, as per the daily Fibonacci chart, the Natural Gas January futures are likely to seek support around Rs 325 - Rs 321.90 - Rs 318.80; whereas, on the upside, the energy-based commodity may counter resistance around Rs 340.60 - Rs 344.90 - Rs 351.