Trades below barrier

But broader trend is up

Crude oil prices dipped last week. Brent crude oil futures on the Intercontinental Exchange (ICE) slipped 1.7 per cent as it closed at $82.1 per barrel. Crude oil futures on the MCX was down 2.7 per cent by ending the week at ₹6,459 a barrel.

BRENT FUTURES ($82.1)

Although Brent futures declined last week, it remains within the range of $8184. Until it stays so, the next swing in price will be uncertain.

If Brent futures regain traction and break out of $84, we could see a quick rise in price to $90, a resistance. Above this level, there are barriers at $93 and $100.

Alternatively, if the contract falls below the support $81, it could extend the decline to $79. Most probably, there will be a bounce off this level. However, if $79 is invalidated, Brent futures could see a dip to $73.

MCXCRUDE OIL (₹6,459)

The March futures contract of crude oil broke out of the resistance at ₹6,520 early this month. But there was no followthrough rally since then. Last week, the contract dipped 2.7 per cent.

That said, the crude oil futures continue to trade above the important support at ₹6,300. The 50day moving average coincides at this level, making it a strong base. So long as this level stays true, there will always be a bullish bias.

If the uptrend resumes, the contract can move up to ₹6,800, a barrier. A breach of this can take the contract to ₹7,000. On the other hand, if the contract breaks below the support at ₹6,300, trend can turn bearish. Nearest support below ₹6,300 is at ₹6,000.

Trade strategy: Hold the longs initiated at ₹6,520 early this month. Maintain the stoploss at ₹6,300. When the contract touches ₹6,800, tighten the stoploss to ₹6,625. Book profits at ₹6,950.