Crude oil prices witnessed considerable recovery last week. Brent crude oil futures on the Intercontinental Exchange (ICE) ($63.90/barrel) gained 4.2 per cent. Whereas the crude oil futures on the MCX (₹5,212/barrel) was up 5.5 per cent.

Brent futures ($63.90)

Brent crude oil futures bounced off $58.50 last week. Thus, the contract has ricocheted twice off this level in as many months. However, this upswing is far from becoming a sustainable uptrend.

For that, the contract should decisively breach the barrier at $68. This can probably open the door for a rally to $75. But in case Brent crude oil futures resume the fall from the current level, it can find support at $58.50 again.

That said, a breach of $58.50 can trigger a fresh leg of downtrend. Support below $58.50 is at $53.

MCX-Crude oil (₹5,212)

Crude oil futures (May) bounced off the base at ₹4,800. Earlier, it had recovered from this price point in April. Consequently, the chart now hints at the formation of a double-bottom chart pattern.

However, this setup will only be confirmed if crude oil rises past the resistance at ₹5,500. But note that there is a barrier before this level at ₹5,300.

A breakout of ₹5,500 can lead to a fresh leg of uptrend, potentially to ₹6,000 and ₹6,200. On the other hand, if there is a fall from here and the contract slips below the support at ₹4,800, we are likely to see the price falling deeper, possibly to ₹4,400 and ₹4,000.

Trade strategy: At this juncture, the risk-reward ratio is unfavourable for both long and short positions. So, traders can stay out.

Published on May 10, 2025