MCX Crude Oil may drop to Rs 8,050; Natural Gas likely to bounce back

The MCX Crude Oil futures seem on course to test the 100-DMA around Rs 8,050-level; Select momentum oscillators on Natural Gas have hit oversold territory, thus a pull-back rally can be expected.

Crude Oil

Bias: Corrective mode

Last close: Rs 8,555

Support: Rs 8,400

Downside Target: Rs 8,050

The MCX Crude Oil futures seem to be in a corrective mode, and currently testing support around the lower-end of the Bollinger Band on the daily charts. The bias has turned slightly negative with the commodity closing below its short-term (20-day) moving average for three consecutive trading sessions.

As per the daily chart, the MCX Crude Oil futures have near support at Rs 8,400-level. Sustained trade below the same can trigger a slide towards Rs 8,050-odd level - which is where the 100-DMA stands. The 200-DMA stands at Rs 6,950 level.

As per the weekly chart, the commodity can also seek support around Rs 8,160 - its 20-WMA. As long as the commodity sustains above the 20-WMA on a closing basis, the medium-term outlook is likely to be positive despite the near-term corrective move.

However, among key momentum oscillator the MACD (Moving Average Convergence-Divergence) has turned negative on the weekly chart, and this should be the major worrying factor for the bulls.  

Accordingly to the weekly Fibonacci chart, the MCX Crude Oil futures could seek support around Rs 8,275, below which the next significant supports stand at Rs 8,090 - 7,950 - 7,815. On the upside, Crude Oil futures need to cross Rs 8,784 to remain upward bias.

Natural Gas

Bias: Pull-back possible

Last close: Rs 537

Support: Rs 508, 494

The MCX Natural Gas June futures witnessed a steep fall of over 31 per cent from its recent high of Rs 749.60 in a matter of just 10 trading sessions. Select momentum oscillators have hit the oversold territory and showing signs of a possible consolidation or pull-back.

In the near-term, the 100-DMA (Daily Moving Average) at Rs 494-odd level and the monthly Fibonacci level at Rs 508 need to be closely watched for support. In case, the commodity is able sustain above these levels, Natural Gas prices can look to pull-back to Rs 560 - 580 odd levels.

So far this week, the commodity has touched a low of Rs 513.30, indicating a possibility of having taken support around the monthly Fibonacci level. Thus, one can expect some pull-back from here on.

As per the weekly Fibonacci chart, the MCX Natural Gas futures need to sustain above Rs 543-level for a meaning pull-back rally to emerge. The upside targets could be Rs 578 - 604 - 622.

As per the daily Fibonacci chart, the MCX Natural Gas futures on Wednesday may trade in a broad range of Rs 517 to Rs 557; with support expected around Rs 530 - 525 - 521 and resistance likely around Rs 544 - 549 - 553.