Here's why MCX Crude Oil can crack to Rs 4,800-level; Natural Gas Rs 280

The MCX Crude Oil and Natural Gas futures seem to be placed on a slippery ground on multiple time-frames, as per the charts.

The MCX Crude Oil futures are seen trending with a negative bias on the short- and medium-term charts. The commodity has dipped below its 20-MMA (Monthly Moving Average) for the first time since December 2020. Meanwhile, Natural Gas futures are currently seen testing support around the 20-MMA at Rs 440-odd level. 

Here are FOUR reasons why charts indicate that MCX Crude Oil futures could crack all-the-way to Rs 4,800-level.

Crude Oil

Bias: Negative

Last close: Rs 6,141

Target: Rs 4,800

Support: Rs 6,052

Resistance: Rs 6,250; Rs 6,325

1. The MCX Crude Oil futures have been trending downwards post November 07, 2022, after the contract hit a high at Rs 7,676 - which was the second occasions wherein the Crude Oil failed to overcome the 200-DMA hurdle. The 200-DMA resistance now stands at a distance length at Rs 7,700.

2. The daily chart has seen formation of 'lower highs, lower bottoms'. As and when, the commodity slips below Rs 6,052; we shall witness continuation of the existing trend.

3. For the last three weeks, the commodity has been testing support around the 100-WMA (Weekly Moving Average) at Rs 6,260, along with the lower-end of the Bollinger Bands at Rs 6,084. Sustained break and trade below the same, indicates a steeper fall towards the 200-WMA, indicating a downside target of Rs 4,800.

4. Crude Oil prices have tumbled over 37 per cent from its high at Rs 9,635 in June 2022. Following the steep fall, the commodity for the first time since December 2020, is seen trading below its 20-MMA (Monthly Moving Average). The 20-MMA indicates resistance at Rs 6,600-level. The momentum oscillators are also clearly in favour of further downside, indicating a possibility of the commodity testing its next major support level around the 50-MMA at Rs 4,775, below which stands the 200-MMA at Rs 4,225.

Having said that, it may not be a one-way fall to the anticipated level, as interminent supports coupled with oversold conditions and change in global scenario could trigger pullback rallies every now and then. Even for now, select momentum oscillators both on the daily and weekly charts are in oversold zone. 

According to the weekly Fibonacci chart, the MCX Crude Oil December futures has so far broken the weekly S2 (support) and may test the weekly S3 at Rs 6,090, below which bears are likely have the upper hand. As per the monthly Fibonacci chart, major support for the commodity is seen at Rs 5,950 - Rs 5,760 - Rs 5,565.

On Wednesday, as per the daily Fibonacci chart, the MCX Crude Oil December contract could seek support around Rs 6,075 - Rs 6,030 - Rs 5,960. On the upside, the Crude Oil futures are likely to face resistance around Rs 6,250 - Rs 6,290 - Rs 6,325. 

Natural Gas

Bias: Negative

Last close: Rs 466.60

Target: Rs 280

Support: Rs 442; Rs 430; Rs 395

Resistance: Rs 492; Rs 506

The MCX Natural Gas futures were seen trading below the key moving averages for the last three trading sessions. The price-to-moving average action is clearly negative for the commodity. 

Further, the commodity has failed to conquer its 100-DMA (Daily Moving Average) hurdle around Rs 595 on the last two occasions. Currently momentum oscillators indicate that Natural Gas futures could test the lower-end of the Bollinger Bands on the daily chart at Rs 430-odd level.

The bias as per the weekly chart is also bearish, and the commodity seems headed towards its 100-WMA (Weekly Moving Average) at Rs 395-odd level, which also coincides with the lower-end of the Bollinger Bands.

In case, the support breaks Natural Gas futures could tumble towards the 200-WMA, indicating a downside target of Rs 280.

However, contrary to the Crude Oil charts, Natural Gas futures still manage to sustain above the 20-MMA, which currently stands at Rs 442. As long as this support holds, the commodity can expect some respite.

Having said that, the next significant support as per the monthly chart coincides with the 200-WMA at Rs 280. Among the momentum oscillators, the MACD in particular is on the verge of turning negative on the monthly chart. Hence, bias is likely to favour the bears for now.  

According to the weekly Fibonacci chart, the MCX Natural Gas December futures have given a strong sell signal for the week. The commodity is likely to test Rs 430 - 395 on the downside, indicates the yearly Fibonacci chart. The bias for this week is likely to remain bearish as long as the commodity sustains below the Rs 492 - 506 resistance range.

On Wednesday, as per the daily Fibonacci chart, MCX Natural Gas December futures may seek support around Rs 458 - Rs 451.70 - Rs 442.50, whereas on the upside the commodity is likely to face resistance around Rs 481.50 - Rs 486 - Rs 490.60.