Crude prices moderated further last week. The Brent crude oil futures on the Intercontinental Exchange (ICE) ($72.80/barrel) dropped 2.2 per cent. Similarly, the crude oil futures on the MCX (₹6,118/barrel) posted a loss of 0.5 per cent.

Brent futures ($72.80)

Brent crude oil futures extended the decline from the preceding week and hit an intra-week low of $71.92 on Wednesday before recovering marginally in the following sessions.

So long as the contract remains below resistance at $75, the bias will be bearish. From the current level, there is a chance of the price dropping to $70.70, a potential support. Below this is the base at $69.

In case Brent crude futures rally past $75, there will be a hurdle at $77. Only a breakout of this can change the outlook positive.

MCX-Crude oil (₹6,118)

The March crude oil futures fell to an intra-week low of ₹5,976 on Wednesday. However, it rose in the following sessions and managed to close above the support at ₹6,000.

Nevertheless, the contract has not shed the bearish bias completely. While there may be a minor uptick to ₹6,200, we expect crude oil futures to decline towards the support levels of ₹5,770 and ₹5,650 before establishing a sustainable rally.

If the price slips below ₹5,650, the sell-off can intensify. But this is an unlikely scenario.

In case the contract rallies from the current level without declining to the ₹5,770-5,650 price band and gets past ₹6,200, it can face resistance at ₹6,400. A move above this level can give a positive outlook for crude oil futures.

But as it stands, the bias is bearish.

Trade strategy: Short crude oil futures at ₹6,200 with a stop-loss at ₹6,420. Book profits at ₹5,770. Post going short, when the price declines to ₹5,850, trail the stop-loss to ₹6,100.