After witnessing high volatility over the last week, crude oil prices settled marginally lower. The Brent crude oil futures on the Intercontinental Exchange (ICE) ($64.80/barrel) was down 1.2 per cent. Whereas the crude oil futures on the MCX (₹5,302/barrel) lost a marginal 0.2 per cent.
Brent futures ($64.80)
Brent crude oil futures saw a zig-zag movement last week. In the first half, it fell to mark a four-year low of $58.40. But then, it surged back quickly.
However, the contract fell short of surpassing the resistance at $66. So long as the contract lies below this level, there will be a bearish bias.
A resumption in downtrend from the current level can drag the contract to $58 and then possibly to $56.
On the other hand, in case the contract cracks the barrier at $66, it can move up to $69-70.70 price band.
MCX-Crude oil (₹5,302)
The April crude oil futures tumbled to mark a low of ₹4,798 on Wednesday. But there was an intraday recovery where the contract closed at ₹5,302. So, the price level of ₹5,000 is relevant as a support.
However, the contract has resistance levels ahead at ₹5,450 and ₹5,750. Also, the broader bias is bearish.
So, if crude oil futures starts falling again, it can retest ₹4,800. A breach of this can drag the contract to ₹4,700 and then possibly to ₹4,300 if the bears retain the strength.
For the contract to turn the outlook positive, it should cross over the key resistance level of ₹5,750. Until then, bears will be at an advantage.
Trade strategy: Traders can short crude oil futures (April) at ₹5,400 and place a stop-loss at ₹5,550. When the contract declines to ₹5,100, tighten the stop-loss to ₹5,350. Liquidate the longs at ₹4,800. Risk-averse traders can stay away from this trade.
Published on April 12, 2025
