The crude oil futures contract traded on the Multi Commodity Exchange (MCX) has plummeted over 10 per cent in the past one week. The global crude oil price tanked over 10 per cent last week after the OPEC decided not to cut its production.
This has also dragged the domestic futures contract. The MCX-crude oil futures contract is currently trading at Rs.2,485 per barrel. It has an immediate support at Rs.2,460.
But since the overall sentiment is very bearish, the contract is more likely to break below this support level. Such a break can drag the contract lower to Rs.2,300 in the coming days. Short-term traders can go short at current levels. Stop-loss can be kept at Rs.2,575 for the target of Rs.2,300.
Strong resistance for the contract is in the Rs.2,600-2,650 zone. Only a strong break above this resistance zone will ease the downside pressure for the contract.
MCX-Natural gas
The contract faced strong resistance in the Rs.155-160 per mmBtu zone in November and started to fall. It has declined below key support of Rs.145 in the past week.
The contract is currently trading at Rs.138 per mmBtu. The outlook is bearish. Immediate support is at Rs.130. A strong break below this support will drag the contract lower to Rs.120, or even Rs.110, in the coming weeks.
Traders with a medium-term perspective can go short. Stop-loss can be kept at Rs.155 for the target of Rs.115. Intermediate rallies to Rs.145 and Rs.150 can be used to accumulate short positions.
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