MCX Crude Oil has to hold above Rs 7,350; Natural Gas may see sharp moves

The overall bias for Crude Oil remains negative, however, select momentum oscillators have turned positive on the daily chart. Natural Gas futures could see sharp directinal moves, hints ADX indicator

The MCX Crude Oil August futures have crossed the 20-DMA after more than two months, the commodity needs to sustain above Rs 7,350 for reviving hopes of a pullback. On the other hand, bias for Natural Gas futures remain positive, however, the commodity is likely to see sharp directional moves in the near term.

Crude Oil

Bias: Neutral

Last close: Rs 7,504

Resistance: Rs 7,530; Rs 7,840

Support: Rs 7,350; Rs 7,110

The MCX Crude Oil futures are seen respecting the 50-WMA (Weekly Moving Average) support for the fourth straight week so far on a closing basis. The 50-WMA currently stands at Rs 7,105.

Further, on the daily scale the MCX Crude Oil September futures have bounced back above the 20-DMA placed at Rs 7,350 for the first time after more than two months. Even though, the price-to-moving averages actions remains negative, select momentum oscillators have turned favourable.

As per the daily chart, Crude Oil futures could attempt a pullback towards its next logical resistance i.e. 50-DMA at Rs 7,900, above which the next significant hurdle is seen at Rs 8,170 - the 20-WMA.

 

However, for the gains to materialise the MCX Crude Oil futures need to sustain above Rs 7,350 on a consistent basis. Failure to do so, can trigger a sharp slide to Rs 6,800-level.

Among the key momentum oscillators, the MACD and the Slow Stochastic are clearly in favour of the bulls, while the 14-day RSI is yet to cross the 50-mark. Thus, it seems that the gains could be short-lived for Crude Oil.

According to the weekly Fibonacci chart, Crude Oil futures are currently testing resistance around the weekly R3 (Resistance) placed at Rs 7,530. Sustained trade above the same can trigger a rally towards Rs 7,840. On the flip side, failure to cross and sustain above Rs 7,530, can trigger a corrective move to Rs 7,415 - Rs 7,330.

On Wednesday, the MCX Crude Oil September futures are likely to trade in a range of Rs 7,340 to Rs 7,670, wherein the energy-based commodity may seek support around Rs 7,445 - Rs 7,400 - Rs 7,370; whereas on the upside the Crude Oil contract could face resistance around Rs 7,560 - 7,605 - 7,635. 

Natural Gas

Bias: Positive

Last close: Rs 740.60

Support: Rs 727, Rs 699.50

Resistance: Rs 758, Rs 785

The MCX Natural Gas futures continue to trade with a positive bias, as supported by the price-to-moving averages action both on the daily and weekly charts. However, select momentum oscillators have entered overbought zone on the daily scale, hence interminnent price dips cannot be ruled out.

On the daily scale, Natural Gas September futures are currently testing resistance around the higher-end of the Bollinger Band at Rs 782-odd level. On the downside, the commodity could test support around the 20-DMA at Rs 680-odd level, below which the next notable support is around Rs 600-mark.

Among the key momentum oscillators, the Stochastic oscillator is in overbought zone, while the ADX is seen gaining strength. Thus, we may see sharp directional moves given the strength in ADX index.

According to the weekly Fibonacci chart, Natural Gas futures are currently testing support around Rs 727, below which the next significant support levels are placed at Rs 716 - Rs 707.70 and Rs 699.50. On the upside, the commodity needs to trade and sustain above Rs 758, for re-testing the resistance at the higher-end around Rs 785.
 

On Wednesday, as per the daily Fibonacci chart, MCX Natural Gas September futures are likely to trade in a range of Rs 697.10 to Rs 784.10. The commodity may seek support around Rs 725.10 - Rs 713.70 - Rs 705.40. On the upside, the Natural Gas futures are likely to face resistance around Rs 756.10 - 767.50 - 775.80.