Crude oil managed to end the week marginally higher despite staying flat for most part of last week. Brent crude oil futures on the Intercontinental Exchange (ICE) was up 1.4 per cent as it closed at $86.4 per barrel, whereas crude oil futures on the MCX gained 0.9 per cent by ending the week at ₹6,805 a barrel.

Brent futures ($86.4)

Brent Crude futures continue to trade above the key resistance-turned-support at $84. This is a positive sign and so, the chances for a rally from the current level are high.

In the coming sessions, there might be some correction in price, possibly to $84. But we expect Brent crude futures to resume the upswing, potentially appreciating to $92. En route, it can face a hurdle at $87 but it is less likely to alter the course of trend.

The bull trend will remain valid so long as the contract stays above base at $81.

MCX-Crude oil (₹6,805)

Crude oil futures (July expiry) has been on a rally since the first week of June. It began on the back of the support at ₹6,100.

However, last week, it moved within the tight range of ₹6,700-6,850. Nevertheless, the broader trend is positive, and we can expect an upside from the current market price.

The contract shows potential to rally to ₹7,100 in the near term. Immediate resistance above ₹7,100 is at ₹7,500.

But before the above said surge in price, the crude oil futures might see a moderation in price to ₹6,500. In case the downswing extends and the price falls below ₹6,350, the short-term outlook can turn bearish.

Trade strategy: We suggested long at ₹6,750 last week. Hold this trade and add longs if the price dips to ₹6,500. Retain the stop-loss at ₹6,300. Book profits at ₹7,100.

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