Brent crude oil futures on the Intercontinental Exchange (ICE) ($64.10/barrel) was up 1.2 per cent last week whereas crude oil futures in the domestic market (Rs 5,449/barrel) gained 1.5 per cent. Here is the outlook and trade recommendation:

Brent crude oil futures rallied to mark a four-month high of $66.82 on Wednesday before moderating to the current level of $64.10. But the price remains above both 21- and 50-day moving averages and the important support at $62.

From the current level, the contract might slip to $62-62.50 price band. But then, we expect it to resume the uptrend and rise to $69 in the near term. Resistance above $69 is at $71.

On the other hand, if Brent crude futures breaches the support at $62, it can extend the downswing to $60. But overall, the bias is bullish and the probability of a rally is high.

MCX-Crude oil (Rs 5,449)

Crude oil futures (February) rallied for the second straight week and hit a four-month high of 15,621 on Wednesday. But then the contract soft-ened to close at 15,449 on Friday.

Despite the dip in price, the contract remains above both 21- and 50-day moving averages and the resistance-turned-support at 5,300 stays valid.

There is a chance for crude oil futures to drop to 25,300. However, the downtick is unlikely to extend beyond this level. The bulls can regain traction and start pushing the price higher.

The price action hints at a rally to Rs 5,650 soon, which can extend to 5,800. But if the contract breaks below the support at 5,300, it can de-cline to 25,060. Support below 15,060 is at Rs 5,000.

Trade strategy: Hold onto the longs initiated on February futures at 25,320. Retain target and stop-loss at 15,650 and 15,200 respectively.

Source: ET Infra. Com 

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