MCX-Crude Oil ( Rs.

3,500)

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MCX-Crude Oil ( Rs. 3,500)

OPEC deciding to cut output saw the MCX-Crude oil contract surging over 9 per cent in the past week. A key trendline resistance is at Rs. 3,550 per
barrel which was tested in the past week. The contract will need to break above this hurdle decisively to extend the current rally. Such a break will

boost the bullish momentum. The broader view remains bullish with strong support in the Rs. 3,000-2,900 zone. This leaves the possibility high for it
to break above Rs. 3,550 in the coming weeks. Such a break will pave the way for a fresh rally to Rs. 3,900 and Rs. 4,000. But inability to break above
Rs. 3,550 may trigger a short-term reversal. A pull-back from Rs. 3,550 will increase the likelihood of the contract falling to Rs. 3,350 initially.

Further break below Rs. 3,350 can drag it to Rs. 3,100 or even Rs. 3,000. The outlook for the contract will turn negative only if it declines below Rs.
2,900 decisively. The next target will be Rs. 2,700. But the possibility of a fall below Rs. 2,900 is low at this juncture.
(This article was published in the Business Line print edition dated December 5, 2016)
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06-12-2016 08:38