MCX Crude Oil can dip to Rs 6,200; Natural Gas futures seen testing Rs 420

On the upside, the MCX Crude Oil futures are likely to face resistance around Rs 7,070 and Rs 7,220. Natural Gas futures face resistance at Rs 485, above which it may pullback towards its 200-DMA.

Both the energy based futures, the MCX Crude Oil and Natural Gas are looking weak on the charts following the break of key support levels. The MCX Crude Oil has dipped below its 20-DMA, while the MCX Natural Gas futures have broken the all-important 200-DMA on the daily chart. 

Crude Oil

Bias: Negative

Last close: Rs 6,842

Target: Rs 6,200

Support: Rs 6,650; Rs 6,540

Resistance: Rs 7,070; Rs 7,220

After a brief rally earlier this month towards the 100-DMA (Daily Moving Average), wherein the MCX Crude Oil futures tested levels of Rs 7,700, the energy-based commodity has once again slipped below its 20-DMA, placed at Rs 6,957, as bears attempt to take back the control.

For now, the Rs 6,957 and Rs 7,055 levels (50-DMA) are the immediate hurdles, and as long as the commodity trades below these levels Crude Oil prices can tumble towards Rs 6,200-odd level - i.e. the support indicated by the lower-end of the Bollinger Band on the daily chart.

Among the key momentum oscillators, the MACD (Moving Average Convergence Divergence) is on the verge of giving a negative breakout. The 14-day RSI and the Slow Stochastic are also slightly in favour of the bears. Hence, a possibility of further downside at this juncture seems possible.

As per the weekly chart, the commodity is currently trading below its 50-WMA at Rs 7,270. The next significant support for the commodity on the weekly chart is seen around Rs 6,050 - which is where the lower-end of the Bollinger Band coincides with the 100-WMA.  

According to the weekly Fibonacci chart, the MCX Crude Oil October futures so far were seen testing support at the weekly S2 (Rs 6,730), below which the next key support levels are Rs 6,650 and Rs 6,540. On the upside, the Crude Oil prices need to sustain above Rs 6,920, for a possible pullback to Rs 7,070 and Rs 7,220 levels.

On Wednesday, the MCX Crude Oil October contract may seek support around Rs 6,765 - Rs 6,705 - Rs 6,625. On the upside, the Crude Oil futures could face resistance around Rs 6,920 - Rs 6,975 - Rs 7,060. 

Natural Gas

Bias: Negative

Last close: Rs 475.40

Target: Rs 420

Resistance: Rs 490; Rs 525

After taking support around the 200-DMA on multiple occasions since the start of this month, the MCX Natural Gas futures have finally broken the support this week. 

The bias has now turned fairly negative, as the commodity trades below the lower-end of the Bollinger Band on the chart, now placed at Rs 485-level.

As long as Natural Gas futures trade below Rs 485-level, a sharp fall to Rs 450 and Rs 420 seems to be on the cards. The broader outlook indicates a likely downside targets of Rs 375 and Rs 280 i.e. the 100-WMA and 200-WMA, respectively.

However, in case, the commodity is able to pullback and sustain above Rs 485, Natural Gas futures may attempt a move towards Rs 490 or even test the 200-DMA at Rs 525.

Momentum oscillators, both on the daily and the weekly charts are in favour of the bears. Hence, the possibility of a downside seems more prominent at this juncture.

According to the weekly Fibonacci chart, the MCX Natural Gas October futures has given a strong sell signal. The contract could now test the monthly supports existing at Rs 453.50 and Rs 428, levels. On the upside, the commodity is likely to face stiff resistance around Rs 506.50 followed by Rs 524.

On Wednesday, as per the daily Fibonacci chart, MCX Natural Gas futures are likely to seek support around Rs 468.20 - Rs 462.80 - Rs 455, while on the upside the energy-based commodity could face resistance around Rs 482.60 - Rs 488 - Rs 495.70.