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Crude oil prices strengthened last week. Brent crude oil futures on the Intercontinental Exchange (ICE) ($65.40/barrel) gained 2.4 per cent. Whereas the crude oil futures on the MCX (₹5,329/barrel) was up 2.5 per cent.
Brent futures ($65.40)
Brent crude oil futures began last week on the front foot. It rallied in the first half to mark a high of $66.81 on Tuesday. However, the price then declined and lost some ground. Yet, it managed to produce a weekly gain.
That said, the price action retains a positive bias. On the back of this, if Brent crude oil futures surpasses the nearest resistance at $68, the outlook can turn positive. In this case, the contract can rally to $75.
But if there is a decline, the contract can find support at $63.80 and $61. Subsequent support is at $58.50.
MCX-Crude oil (₹5,329)
Crude oil futures (June) moved up and closed above the 21-day moving average (DMA) last week. Although this is a positive sign, the contract has a barrier at ₹5,500 where the 50-DMA coincides.
If the contract can build on the positive momentum and rally past ₹5,500, the outlook, at least for the short term, can turn bullish. This can lift the contract further towards the resistance band of ₹6,000-6,100. A breach of ₹6,100 can open the door for a rally to ₹7,000.
On the other hand, if the contract declines from the current level, it can find support at ₹5,180 and ₹5,000. Subsequent support is at ₹4,750.
Trade strategy: Traders can buy crude oil futures if it breaks out of ₹5,500. Place stop-loss at ₹5,200 initially and revise it to ₹5,600 when the contract touches ₹5,800. Book profits at ₹6,100.
Published on May 17, 2025
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