The Crude Oil futures contract traded on the Multi Commodity Exchange (MCX) has been retreating after testing its 100-day moving average resistance earlier this week. The contract recorded a high of ₹3,365/barrel on Tuesday and has come off to the current levels of ₹3,212. However, there is no threat for the short-term up trend that has been in place since March. Immediate support is at ₹3,200. Subsequent key supports are at ₹3,135 and ₹3,100. Declines to these supports are expected to attract fresh buying interest entering into the market. Significant resistance is at ₹3,380. A strong break above this level can take the contract higher to ₹3,500.

Short-term traders can initiate fresh long positions. Stop-loss can be placed at ₹3,055 for the target of ₹3,450.

The downside pressure will increase if the contract declines below ₹3,100. Such a break can drag it down to ₹3,000 where the 21-day moving average support is also poised.

MCX-Natural gas: The contract is stuck inside a narrow range between ₹162 and ₹170 per mmBtu for the second week. Currently the contract is poised near the lower end of this range at ₹164. The immediate outlook is not clear. Traders can stay on the sidelines until a clear trade signal emerges.

A breakout on either side of ₹162-170 will decide the next trend for the contract. A break above ₹170 will be bullish for the targets of ₹175 and ₹180. On the other hand, the downside pressure will increase on a break below ₹162 and drag it to ₹150 there after.

Note: The recommendations are based on technical analysis. There is a risk of loss in trading.

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