Crude oil futures traded on the Multi Commodity Exchange have found support at around ₹3,500 a barrel in the past week. The contract recorded a 52-week low at ₹3,436 on December 16 and has been hovering just above the support level. Indicators such as relative strength index and price rate of change in the daily chart are displaying positive divergence, signifying that the trend reversal is on the charts. Moreover, the moving average convergence divergence indicator signals a buy. There is no immediate threat for the contact as long as it trades above the key support level of ₹3,500.

The contract has an immediate resistance at ₹3,760 levels. A decisive breakthrough of this level will push the contract higher to ₹4,000 in the weeks ahead.

Traders with a high risk appetite can consider initiating long position with a stop-loss at ₹3,450 for the target of ₹4,000. Next resistance above ₹4,000 is at ₹4,270 levels. Conversely, a conclusive fall below ₹3,500 will alter the positive view and pull the contact down to ₹3,450 and ₹3,400 levels.

Natural gas: MCX natural gas futures emphatically broke out of their long-term support at ₹215 per mmBtu, tumbling 9 per cent on Monday. For this week, the contract has declined 13.4 per cent. This fall has strengthened the contract long-term downtrend. It is hovering well below its 50- and 200-day moving averages. Both the daily and weekly indicators are featuring in the bearish zone backing the downtrend. The short-term outlook is bearish. Traders with a short-term can sell the contract on rallies with a stop-loss at ₹202. Targets are ₹180 and ₹170.

Significant resistances to note are placed at ₹205, ₹215 and ₹225 levels. Only a decisive rally above ₹240 will alter the short-term downtrend.

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