Crude Oil, Copper: Check key trading strategy, target price and more

Crude Oil Outlook

Crude Oil retreated due to risk-off sentiment ahead of key PCE index data, with WTI oil settling below $80 as equities declined. This drop erased Tuesday’s 2.7 per cent gains, which were driven by geopolitical risks like ship attacks in the Red Sea and Israel’s advance into Gaza.

Over the past year, US benchmark crude is up about 14 per cent due to Middle East tensions and OPEC output cuts. However, the Israel-Hamas conflict hasn't disrupted oil flows significantly, and non-OPEC supplies remain plentiful, capping gains.

OPEC is expected to extend its production cuts in an upcoming meeting, which has recently helped both WTI and Brent to break above their 100-day moving averages.

Technicals

On the daily timeframe, MCX Crude Oil (June) experienced a breakout from its descending channel pattern but failed to sustain the breakout, forming an inverted hammer candlestick pattern. A break below 6,580 could potentially lead to further downside movement. Key resistance levels to watch are at 6730 and 6870, while support levels are at 6530 and 6450.

Intraday Trading Strategy  

Sell MCX Crudeoil June futures at Rs 6580 with a stop loss of Rs 6630 and a price target of Rs 6500

Copper Outlook

Copper prices have been pressured by a consistent rise in LME inventories, with 27,850 mt added this month and withdrawal rates dropping to 8.8 per cent, the lowest since March 2024. Over 200,000 mt of Copper from South America and China are expected to arrive at LME and CME warehouses soon. 

Additionally, BHP has abandoned its plan to acquire Anglo American. The State Council's "2024-2025 Energy Conservation and Carbon Reduction Action Plan" aims to ease copper ore supply by lifting NEV purchase restrictions and controlling new smelting capacities for copper and alumina.

Technicals: 

On the daily timeframe, MCX Copper has broken below its 21 EMA, indicating weakness. Additionally, the RSI is showing negative divergence, suggesting bearish sentiment. Resistance levels are around 886 and 895, while support levels are at 873 and 865.

Intraday Trading Strategy  

Sell MCX Copper June futures at Rs 877 with a stop loss of Rs 887 and a price target of Rs 865

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Disclaimer: Neha Qureshi is a senior manager, technical research analyst of commodities & currency. Views expressed are her own.