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After choppy trading sessions over the past week, crude oil prices ended lower on a weekly basis. Brent crude oil futures on the Intercontinental Exchange (ICE) declined 1.8 per cent to close at $90.5 per barrel. Crude oil futures on the MCX slipped 3.2 per cent to end the week at ₹7,128.
That said, the Israel-Hamas war is keeping the investors on the edge, as the fear of it spreading to other parts of the region remains.
According to the latest data from Energy Information Administration (EIA), the crude oil inventory in the US increased by 1.4 million barrels versus the expected drop of 0.5 million barrels. However, this did not weigh too much on the price as the geopolitical turmoil continues.
Technically, both Brent futures and MCX crude oil futures stay above key support levels. Until these levels hold, the bias will be bullish.
MCX-Crude oil (₹7,128)
The November futures of crude oil declined early last week. But then, it was largely moving within a range, especially in the second half.
Nevertheless, the contract retains the bullish traits. It has formed a higher low and has been trading above the important support band of ₹6,900-7,000.
That said, for the bulls to regain their earlier momentum, the contract should go past the nearest resistance at ₹7,350. In such a case, we can see a quick rally to ₹7,700. Resistance above this level is at ₹8,000.
On the other hand, if there is a fall from here which can drag crude oil futures below ₹6,750, the price could decline further to ₹6,500. Note that a breach of the support at ₹6,500 can turn the short-term outlook bearish. Immediate support below ₹6,500 is at ₹6,250.
Trade strategy: As the broader trend is bullish, one can buy crude oil futures now at ₹7,128. Add longs if the price dips to ₹7,000. Place stop-loss at ₹6,750.
When the price goes above ₹7,400, tighten the stop-loss to ₹7,200. Exit at ₹7,650.
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