MCX Crude Oil can pullback to Rs 7,700; Natural Gas likely to test Rs 600

The pullback in MCX Crude Oil futures is aided by cut in oil production by OPEC+ members. The commodity crossed its 50-DMA for the first time since July 2022.

The MCX Crude Oil futures are in pullback mode as select momentum oscillators on the weekly chart were in oversold conditions. The price-to-moving averages action remains negative, hence should be cautious at higher levels. On the other hand, the MCX Natural Gas futures seem poised for a fresh up move this week.

Crude Oil

Bias: Negative

Last close: Rs 7,177

Resistance: Rs 7,570; Rs 7,815

Support: Rs 7,080; Rs 6,855

The MCX Crude Oil futures crossed over the 50-DMA (Daily Moving Average) for the first time since early July. The recent 3-day rally has helped Crude Oil prices conquer, both, the 20-DMA (Rs 6,780) and the 50-DMA (Rs 7,080) on a closing basis.

The rally started on expectation of an oil production cut by the OPEC+. The group on Wednesday agreed to its deepest cuts (2 million barrels per day) to production since the 2020 COVID pandemic, despite a tight market and opposition to cuts from the United States and others. READ MORE

The current up move seems more of a pullback rally, as select momentum oscillators mainly on the weekly chart were in considerable oversold conditions. The weekly chart indicates that at Crude Oil prices can continue to edge higher towards Rs 7,700-level - its 20-WMA (weekly Moving Average).

As per the daily chart, the price-to-moving average action continues to remain negative. And as such, the pullback rally is expected to face resistance around the 100-DMA and 200-DMA at Rs 7,815 and Rs 7,570, respectively.

According to the weekly Fibonacci chart, the MCX Crude Oil October futures have given a strong 'Buy' signal for the week. The bias for remainder of the week is likely to remain positive as long as the commodity sustains above Rs 6,855. 

On Thursday, the MCX Crude Oil October contract may trade in a range of Rs 7,060 to Rs 7,320, wherein the commodity may seek support around Rs 7,130 - Rs 7,090 - Rs 7,060. On the upside, the Crude Oil futures may counter resistance around Rs 7,225 - Rs 7,265 - Rs 7,290. 

Natural Gas

Bias: Negative

Last close: Rs 567.10

Resistance: Rs 600; Rs 654

Support: Rs 541; Rs 528

The MCX Natural Gas futures seem to have taken support around the 200-DMA, placed at Rs 514-odd levels, for the time being. The commodity is now on course to test its 20-DMA at Rs 600-level, followed by 50-DMA at Rs 654.

An up move is anticipated for the energy-based commodity, as key momentum oscillators mainly the MACD is on the verge of a positive crossover. The Slow Stochastic is also favourable on the daily chart.

According to the weekly Fibonacci chart, the MCX Natural Gas October futures have given a minor 'Buy' signal for the week. The Rs 541 and Rs 528 levels are the key support levels for the remainder of the week. On the upside, Natural Gas prices can test Rs 582 - Rs 589 - Rs 595.

On Wednesday, as per the daily Fibonacci chart, MCX Natural Gas futures are likely to seek support around Rs 560.40 - Rs 555.50 - Rs 548.40, while on the upside the commodity may face resistance around Rs 573.70 - Rs 578.60 - Rs 585.70.