Range-bound MCX Crude Oil may test Rs 6,100; Natural Gas in oversold zone

Natural Gas futures have tumbled over 74 per cent their record highs. The commodity is now seen trading below major monthly moving averages after two years.

The MCX Crude Oil futures continue to broadly trade in the Rs 6,100 to Rs 6,700 range. Currently, the bias seems in favour of Crude Oil futures testing the lower-end of the indicative trading band. 

The Natural Gas futures, which, are oversold may seek support around the Rs 200-mark. There is a ray of hope on the weekly chart which suggests that the commodity may bottom-out soon.

Crude Oil

Bias: Range-bound

Last close: Rs 6,282

Anticipated Range: Rs 6,770; Rs 6,100

The MCX Crude Oil futures continue to trade in a range-bound manner. Yet again, after facing resistance around its 100-DMA (Daily Moving Average) at Rs 6,700-odd level, the counter has retraced and now seems headed towards the lower-end of the anticipated trading range, thus indicating a downside test of Rs 6,100-odd level.

The MCX Crude Oil futures have failed to conquer the 100-DMA since mid-November 2022. On the other hand, the energy-based commodity has consistently found support around the lower-end of the Bollinger Bands on the daily chart, since early December.

Hence, the overall bias remains range-bound as long as Crude Oil trades within the specified range. A break on the either side could trigger the next decisive move.

So far this week, the MCX Crude Oil February futures have given a sell signal on the weekly and monthly Fibonacci chart. Thus, indicating that the weekly bias is likely to remain negative as long as Crude Oil prices sustain below Rs 6,445. In the current pullback, resistance can be expected at Rs 6,335 - Rs 6,370 - Rs 6,400 levels.

The monthly Fibonacci chart indicates the possibility of Crude Oil testing the downside targets placed at Rs 6,180 - Rs 6,095 - Rs 6,005 during the course of the month.

On Thursday, as per the daily Fibonacci chart, the MCX Crude Oil February contract is likely to face resistance around Rs 6,345 - Rs 6,390 - Rs 6,455. On the downside, the Crude Oil futures may seek support around Rs 6,220 - Rs 6,175 - Rs 6,110 today.

Natural Gas

Bias: Bearish

Last close: Rs 211.0

Target: Rs 175

Support: Rs 199

Resistance: Rs 275

The MCX Natural Gas futures are trading in extremely oversold conditions on the daily charts. The weekly chart, however, offer a ray of hopes indicating a possibility of a likely bottom this week. Mainly, on account, of a weakening ADX index - i.e. it suggests that the existing trend may lose steam soon. 

Given the steep 74 per cent fall from its record high of Rs 801 in August 2022, Natural Gas futures are now seen trading below the 100- and 200-MMA (Monthly Moving Averages) for the first time since August 2020.

The monthly chart further indicate a possibility of Natural Gas prices tumbling to lows of Rs 145-odd levels, which is the lower-end of its Bollinger Bands.

Meanwhile, the weekly chart suggests that Natural Gas needs to close above Rs 210-odd level on Friday, for hopes of a pullback to materialize. On the daily scale, support is now seen at Rs 199.50.

As per the weekly Fibonacci chart, the MCX Natural Gas February futures may seek support around Rs 205.20 - Rs 197.80 this week, below which the monthly Fibonacci chart indicates support at Rs 189.30 - Rs 163.70. On the upside, Natural Gas prices need to trade and sustain above Rs 222.80 for a pullback rally to emerge.

On Thursday, as per the daily Fibonacci chart, the Natural Gas futures may seek support around Rs 206.30 - Rs 202.70 - Rs 197.50; whereas, on the upside, the commodity is likely to counter resistance around Rs 219.50 - Rs 222.10 - Rs 224.70.