MCX Crude Oil may soon breakout; Bias negative for Natural Gas below Rs 224

The anticipated trading band for the MCX Crude Oil futures has got narrower to Rs 6,180 - Rs 6,660. Broader trend for Natural Gas remains weak as the commodity trades below 200-WMA.

The MCX Crude Oil futures have retraced for the twelfth time in the last three months after facing resistance around its 100-DMA. However, with the trading band getting narrower over the last couple of weeks a breakout seems to be on the cards in the near term.

Here's how Crude Oil and Natural Gas futures are placed on the charts.

MCX Crude Oil

Bias: Range-bound

Last close: Rs 6,408

Support: Rs 6,420; Rs 6,390

Indicative Range: Rs 6,180 - Rs 6,660

Yet again the MCX Crude Oil futures changed course after testing resistance at the 100-DMA. In the past three months, Crude prices attempted to conquer the 100-DMA now placed at Rs 6,575 on 12 occasions but failed. 

Hence, the broader outlook for Crude Oil futures remains range-bound. The anticipated trading band is Rs 6,180 - Rs 6,660 as per the Bollinger Bands on the daily charts. The range has been getting narrower over the last couple of weeks, thus suggesting that a breakout shall take place in the near future.

For now, Crude Oil prices are likely to test support around the 20-DMA at Rs 6,420-level. Sustained trade below the same could see the prices drift towards the anticipated lower-end of the trading range.

Select momentum oscillators like the MACD (Moving Average Convergence-Divergence) and Slow Stochastic are marginally in favour of the bulls. However, the actual strength may emerge only on sustained trade above Rs 6,600 level.

According to the weekly Fibonacci chart, the MCX Crude Oil March futures are currently attempting to take support around the weekly S1 placed at Rs 6,390. As long as prices stay above the same, Crude Oil futures may attempt to re-test Rs 6,600-odd level yet again this week.

On Wednesday, as per the daily Fibonacci chart, the MCX Crude Oil March futures may seek support around Rs 6,370 - Rs 6,340 - Rs 6,300. On the upside, the Crude Oil prices are likely to face resistance around Rs 6,475 - Rs 6,495 - Rs 6,515.

MCX Natural Gas

Bias: Negative

Last close: Rs 217.40

Support: Rs 208.30

Resistance: Rs 224

After a smart 39 per cent pullback from its recent lows, the MCX Natural Gas futures witnessed selling pressure and crossing the higher-end of the Bollinger Bands on the daily chart.

The MCX Natural Gas futures are now seen testing support around the 20-DMA (Daily Moving Average) at Rs 208.30 level. As long as the commodity sustains above the same, Natural Gas futures can bounce back towards the higher-end of the anticipated trading band placed at Rs 242, above which the immediate hurdle is the 50-DMA at Rs 253.

On the contrary, in case, the 20-DMA fails to hold - Natural Gas prices can dip towards the lower-end of the Bollinger Bands at Rs 175.

On the weekly scale, although oversold the bias for Natural Gas futures remains clearly negative for the commodity trades below the 200-WMA (Weekly Moving Average), which now stands at Rs 287.

As per the weekly Fibonacci chart, the bias for the remainder of the week is likely to remain bearish as long as the commodity trades below Rs 224, above which the key hurdles are placed at Rs 231.30 - 236.50. One can expect significant short covering only after these hurdles are cleared.

On Wednesday, as per the daily Fibonacci chart, the MCX Natural Gas March futures could seek support around Rs 214.50 - Rs 213.70 - Rs 212.90; whereas, on the upside, the commodity may face resistance around Rs 220.30 - Rs 221.10 - Rs 222.