Immediate hurdle for Crude Oil seen at Rs 6,725; Natural Gas to test Rs 380

On the downside, key support for MCX Crude Oil stands at Rs 6,350, below which a steeper fall to Rs 4,800 seems possible. Rs 413 - 418 is the resistance zone for Natural Gas on Wednesday.

The MCX Crude Oil futures and Natural Gas futures continue to trade with a negative bias, thus keeping the possibility open for a steep fall towards Rs 4,800 and Rs 285 levels in the medium- to longer time-frame.

Crude Oil

Bias: Negative

Last close: Rs 6,681

Target: Rs 4,800

Support: Rs 6,350; Rs 5,850

Resistance: Rs 6,725; Rs 6,830

The MCX Crude Oil futures, so far, this week managed gains in the first two trading sessions but at the same time faced resistance at its 50-DMA (Daily Moving Average) at Rs 6,725. The 50-DMA is seen acting as an immediate hurdle for the Oil prices for now.

The journey above that too is likely to be laboured, as the MCX Crude Oil futures are likely to counter multiple headwinds. The higher-end of the Bollinger Bands on the daily chart, indicates resistance at Rs 6,830, followed by the 100-DMA at Rs 6,885 and the 200-DMA at Rs 7,550.

On the downside, meaningful support for Crude Oil prices can be expected around the 20-DMA at Rs 6,350 level, below a re-test of its recent lows around the Rs 5,850 level seems possible.

As long as Crude Oil futures trade with a negative bias, the longer-term downside target of Rs 4,800 cannot be ruled out.

Among the key momentum oscllators on the daily chart, the MACD (Moving Average Convergence-Divergence) and the Slow Stochastic are showing some signs of exhaustion, hence should be prepared for a dip in the near term.

Whereas, on the weekly scale, the 100-WMA at Rs 6,335 is a key level to watch out for. As long as the energy-based commodity manages to survive above this level, there may be some hopes of a counter bull rally.

According to the weekly Fibonacci chart, the MCX Crude Oil January futures may face resistance around Rs 6,745 - Rs 6,835 - Rs 6,965 this week. On the downside, the commodity may seek support around Rs 6,500 - Rs 6,400 - Rs 6,275 levels.

On Wednesday, as per the daily Fibonacci chart, the MCX Crude Oil January contract may seek support around Rs 6,625 - Rs 6,610 - Rs 6,590. On the upside, the Crude Oil futures is likely to counter resistance around Rs 6,715 - Rs 6,735 - Rs 6,770. 

Natural Gas

Bias: Negative

Last close: Rs 425

Target: Rs 285

Support: Rs 380

The MCX Natural Gas futures are once again seen testing the 100-WMA (Weekly Moving Average) on the charts, now placed at Rs 404 level. The medium-term bias is also on the verge of turning negative, with the 20-WMA at Rs 553 seen on course to dip below the 50-WMA at Rs 523.

Thus, the possibility of Natural Gas extending the slide towards the 200-WMA, indicating a downside target of Rs 285-odd level seems on the cards.

Among the key momentum oscillators, the weekly MACD has given a negative divergence. Similary on the daily scale, the MACD and RSI remains in favour of the bears.  

As per the price action, the daily chart indicates some support for Natural Gas futures around Rs 380 level.

According to the weekly Fibonacci chart, the MCX Natural Gas January futures may test Rs 401 - Rs 380 - Rs 348 on the downside this week. Whereas, the upside seems to be capped around Rs 460; above which the commodity can rally to Rs 480 - Rs 512.

On Wednesday, as per the daily Fibonacci chart, given the sharp fall in opening deals, the bias for the remainder of the day is likely to remain bearish as long as Natural Gas January futures trade below Rs 413 - Rs 418 resistance zone. For a pullback to materialize today, the energy-based commodity will have to rebound and sustain above Rs 421 level.