Uptrend in Crude oil capped at Rs 6,760; Pivot for Natural Gas at Rs 285

In case Rs 285 holds, Natural Gas futures can potentially rally to Rs 344.

The MCX Crude Oil futures have pulled back above the 50-DMA after almost two months, sustained trade above the same is the key for further strength. Given the current chart set-up, the commodity is likely to face considerable resistance around the 100-DMA at Rs 6,740 level.

Natural Gas futures have been consolidating around the Rs 285 level for the last two weeks. While a short-term pullback cannot be ruled out, break and sustained trade below the support level can trigger a fresh slide at the counter.

Crude Oil

Bias: Marginally Positive

Last close: Rs 6,508

Target: Rs 6,740; Rs 6,760

Support: Rs 6,453; Rs 6,425

Resistance: Rs 6,614

The MCX Crude Oil futures have recovered steadily from the lows of Rs 6,000-odd level, and were seen trading above the 50-DMA (Daily Moving Average) for the first time since mid-November.

The MCX Crude Oil January futures are currently placed above the 20-DMA and the 50-DMA at Rs 6,425 and Rs 6,453, respectively. The 20-DMA is seen converging and likely to cross the 50-DMA in the coming days, which will be a sign of strength.

However, the upside for now seems capped around the 100-DMA, placed at Rs 6,740, as this level nearly coincides with the monthly Fibonacci resistance at Rs 6,760. In case, Crude Oil futures manage to conquer this resistance, a rally towards Rs 6,900 can be possible.

On the downside, the shorter term moving averages are likely to act as near term supports.

Among the key momentum oscillators, the 14-day RSI (Relative Strength Index) and the MACD (Moving Average Convergence Divergence) remain in favour of the bears on the daily chart.

On Wednesday, as per the daily Fibonacci chart, the MCX Crude Oil January contract may face resistance around Rs 6,614 level, above which Crude Oil prices could head towards the 100-DMA. On the other hand, failure to sustain above Rs 6,545 could trigger some profit-taking.

Natural Gas

Bias: Negative

Last close: Rs 295

Target: Rs 235

Support: Rs 285

Resistance: Rs 344

The MCX Natural Gas futures are seen testing support around the 200-WMA (Weekly Moving Average) at Rs 285, since the last two weeks. The selling momentum seems to be waning in the last few trading sessions; hence a pullback in the near term cannot be ruled out.

As long as the energy-based commodity manages to sustain above Rs 285, it can pull back to its 20-DMA placed at Rs 344 level.

Among the key momentum oscillators, the RSI has been languishing near the oversold zone, while the MACD seems to be on the verge of turning positive. 

Having said that, the broader trend as per the weekly chart remains negative. Break and sustained trade below Rs 285, can trigger a slide towards Rs 235 level.

On Wednesday, as per the daily Fibonacci chart, the Natural Gas January futures may seek support around Rs 288 - Rs 285.80 - Rs 283.60; whereas, on the upside, the energy-based commodity is likely to counter resistance around Rs 302 - Rs 304.20 - Rs 306.40.