Uptrend intact
Hold on to the long positions
Gold experienced a minor correction, but silver shot up last week. The former softened 1 per cent and the latter gained 3.7 per cent to close at $2,155.6 and $25.2 per ounce, respectively.
On the MCX, gold futures lost 0.7 per cent to end at ₹65,542 (per 10 gram), whereas silver futures was up 1.9 per cent to close at ₹75,650 (per kg).
MCXGOLD (₹65,542)
Gold futures (April contract), after seeing a dip in the early part of last week, was then moving in a narrow range. Yet, the overall bull trend remains intact.
The contract is expected to resume the uptrend either from the current level or after seeing a decline to ₹64,800.
Gold futures can rally to ₹68,000 and then to ₹70,000 in the short term.
In case the price falls below ₹64,800, it can find support between ₹63,800 and ₹64,000.
Trade strategy: Last week, we suggested buying gold futures at ₹66,000. Hold this position. Accumulate at ₹64,800. Retain the stoploss at ₹63,900.
When the contract goes past ₹67,000, raise the stoploss to ₹65,800. Liquidate the longs at ₹68,000.
MCXSILVER (₹75,650)
Silver futures’ (May series) gain happened in the second half of last week.
We expect the upswing to extend to ₹77,000, a resistance. Subsequent resistance is between ₹79,000 and ₹80,000.
So long as the silver futures trade above ₹74,000, the trend will be bullish. Support below ₹74,000 is at ₹73,000.
Trade strategy: We recommended going long on silver futures at ₹72,280 a couple of weeks ago. Hold this trade.
But move the stoploss up from ₹72,700 to ₹73,500.
When the contract goes above ₹76,000, tighten the stoploss to ₹74,500. Book profits at ₹76,700.
Crude oil seems to have resumed the upswing after consolidating over the past few weeks. Brent crude oil futures on the Intercontinental Exchange (ICE) appreciated 3.9 per cent by closing at $85.3 per barrel. Crude oil futures on the MCX was up 3.7 per cent by ending the week at ₹6,680 a barrel.
BRENT FUTURES ($85.3)
Brent futures, which has been charting a sideways trend since early February, broke out of the $8184 range last week. Thus, the bulls seem to have regained traction and the probability of further rally is high.
We expect a quick rally to $90, a resistance. Above this, there are barriers at $93 and $100.
Henceforth, $84 will act as a strong support. Below this, potential support levels are at $81 and $79. Notably, the 50day moving average coincides at $81.
MCXCRUDE OIL (₹6,680)
The March futures contract of crude oil regained bullish momentum and rallied last week. It made a higher high as it surpassed the resistance at ₹6,650.
Since this contract expires on March 19, we will consider April series for analysis.
The April contract bounced off the support at ₹6,350 and moved above the barrier at ₹6,600. From the current level, it is likely to get past the nearest resistance of ₹6,800 and hit ₹7,000 soon.
If there is a decline from here, ₹6,600 will act as a support. Below this level, ₹6,515 and ₹6,350 are the important supports.
Trade strategy: We suggested buying March contract at ₹6,520, which closed at ₹6,720 last week. As the expiry is near by, traders can roll over to April futures.
Exit March longs now at ₹6,720 and buy April futures at ₹6,680. Place stoploss at ₹6,480. When the contract rallies past ₹6,800, tighten the stoploss to ₹6,650. Book profits at ₹6,950.