MCX Crude Oil may soon test 200-DMA; Bias for Natural Gas turns neutral

The MCX Crude Oil futures could dip briefly below the 200-DMA at Rs 7,275 indicates the weekly momentum oscillators. Bias for Natural Gas futures no longer negative.

The MCX Crude Oil futures are within striking distance of its 200-DMA, the key support level which it has been respecting so far. However, the bias remains negative; hence a brief break of the same cannot be ruled out. Meanwhile, the trend for Natural Gas futures has turned neutral from negative.

Here's what expect from the two energy-based commodities in the near term:

Crude Oil

Bias: Negative

Last close: Rs 7,505

Resistance: Rs 7,830, Rs 8,260

Support: Rs 7,345, Rs 7,275

The MCX Crude Oil futures are trading precariously close to its long-term (200-DMA) moving average on the daily chart. The 200-DMA at Rs 7,275 and the lower-end of the Bollinger Band at Rs 7,345, have been offering support for the commodity in the recent past.

In case, Crude Oil futures break below the 200-DMA, the commodity has near support around Rs 7,165 and Rs 6,980, in the form of lower-end of the Bollinger Band on the weekly chart and the 50-WMA.

While the key momentum oscillators on the daily chart are in neutral mode, the select momentum oscillators like the MACD and the RSI hint at the possibility of Crude Oil prices testing the lower support range in the near future.

In case of an up move, MCX Crude Oil futures are likely to face resistance around the 20-DMA and 20-WMA at Rs 7,830 and Rs 8,260, respectively.

According to the weekly Fibonacci chart, Crude Oil has given a sell signal for the week. The bias for the remainder of the week is likely to remain negative as long as Crude Oil futures sustain below Rs 7,842. A move beyond on this point could trigger short-covering, with prices likely to jump up to Rs 7,980 to Rs 8,085 during the week.

On the downside, Rs 7,450 is a key support, sustained trade below it, can trigger a fall to Rs 7,280 - 7,105 - 6,930.

On Wednesday, the MCX Crude Oil August futures are likely to trade in a range of Rs 7,336 to Rs 7,674, with the commodity likely to seek support around Rs 7,445 - Rs 7,400 - 7,370; whereas on the upside the commodity may face resistance around Rs 7,565 - 7,610 - 7,640. 

Natural Gas

Bias: Neutral

Last close: Rs 615.40

Support: Rs 596, Rs 590

Resistance: 642.60

After the phenomenal 78 per cent rally from a low of Rs 426.8 on July 06 to a high of Rs 760 on July 26, the MCX Natural Gas futures have corrected by a significant 20 per cent in the following five trading sessions. 

The MCX Natural Gas August futures are currently seen testing support around the 20-- and the 50-DMA around Rs 590-odd levels. The 50-DMA is on the verge of crossing over the 20-DMA. The next significant support for the commodity is seen around Rs 555 - its 100-DMA.

Among the key momentum oscillators, the 14-day RSI and the MACD are showing signs of tiredness. The ADX index is at a low point, thus indicating lack of strength in the current trend. 

According to the weekly Fibonacci chart, Natural Gas futures so far seem to be holding support around the weekly S1 at Rs 596, below which the next support levels are at Rs 581.20 and Rs 566.70. On the upside, the commodity needs to trade and sustain above Rs 642.60, for gaining strength.

On Wednesday, as per the daily Fibonacci chart, MCX Natural Gas futures are likely to trade in a range of Rs 587.70 to Rs 643.10. The commodity may seek support around Rs 605.50 - 598.30 - 593. On the upside, the Natural Gas futures could face resistance around Rs 625.30 - 632.50 - 637.80.