MCX Crude Oil futures can slide to Rs 5,700-level, chart suggests

Sustained trade below Rs 6,800-level, can trigger a sharp slide in MCX Crude Oil August futures towards the 50-WMA; Meanwhile, bias for Natural Gas is positive.

The MCX Crude Oil August futures are once again trading below the key 200-DMA, thus giving the upper hand to the bears. The weekly chart indicates that sustained trade below the Rs 6,800-level, can trigger a sharp slide towards its 50-WMA, with interim support seen at Rs 6,200.

Crude Oil

Bias: Negative

Last close: Rs 6,870

Near Resistance: Rs 7,000

Support: Rs 6,200; Rs 5,700

The pullback rally for MCX Crude Oil futures after falling below the 200-DMA (Daily Moving Average) earlier this month was extremely brief. The Crude Oil futures have once again crashed below the 200-DMA tracking significant losses in the global counterparts.

The bears are likely to tighten their grip, as the 20-DMA at Rs 7,500, is now seen on course to slip below the 200-DMA placed at Rs 7,320. The 20-DMA is already below the other key moving averages - 50- and 100-DMAs placed at Rs 8,130 and Rs 8,160, respectively.

Further, on the weekly charts Crude Oil is threatening to end below the 20-WMA (Weekly Moving Average) for the first time since November 2020. The MCX Crude Oil August futures are currently testing support around the lower-end of the weekly Bollinger Band at Rs 6,820-odd level, break and sustained trade below the same can trigger a sharp slide towards the 100-WMA - indicating a downside target of Rs 5,700-odd level.

The momentum oscillators on the weekly chart are strong in favour of the bears, hence the possibility of a steep fall cannot be ruled out. However, as per the monthly chart, Crude Oil futures in the interim may seek support around the 20-MMA (Monthly Moving Average) at Rs 6,200-odd level.

According to the weekly Fibonacci chart, Crude Oil futures have broken the S3 support placed at Rs 7,000-mark. Hence, the bias for the remainder of the week is likely to remain bearish, as long as the crude oil trades below Rs 7,000-mark, with next key resistance seen at Rs 7,140 level.

On Wednesday, the MCX Crude Oil August futures are likely to trade in a range of Rs 6,640 to Rs 7,100, wherein the commodity may seek support around Rs 6,790 - Rs 6,730 - 6,685; whereas on the upside the Crude Oil is likely to face resistance around Rs 6,950 - 7,010 - 7,055. 

Natural Gas

Bias: Positive

Last close: Rs 734.70

Support: Rs 720, Rs 698

Resistance: Rs 760

The MCX Natural Gas futures have pulled back smartly and once again seen trending along the higher-end of the Bollinger Band on the daily chart at Rs 742-odd level. The bias as per the price-to-moving averages action remains favourable, as the commodity trades firmly above all the key moving averages. 

The weekly chart indicates some resistance for the Natural Gas futures around Rs 760-odd level, above which the upmove may gain momentum. Overall, the bias is likely to remain positive as long as the commodity holds above the Rs 600-mark.

The momentum oscillators both on the daily and weekly charts also are in favour of the bulls. 

According to the weekly Fibonacci chart, the near-term support for Natural Gas futures is seen at Rs 720, below which Rs 698 is likely to act as a significant support. On the upside, the commodity can spurt to Rs 750 and Rs 763 levels.

On Wednesday, as per the daily Fibonacci chart, MCX Natural Gas August futures are likely to trade in a range of Rs 709.40 to Rs 760. The commodity may seek support around Rs 725.70 - 719.10 - 714.30. On the upside, the Natural Gas futures are likely to face resistance around Rs 743.70 - 750.30 - 755.20.