Crude oil prices rallied last week after declining in the preceding two weeks. The Brent crude oil futures on the Intercontinental Exchange (ICE) ($74.4/barrel) appreciated 4.6 per cent. The crude oil futures on the MCX (₹6,023/barrel) was up 5.1 per cent.

Brent futures ($74.4)

Brent crude oil futures rebounded from just above the support at $70.50. Although it rose above a hurdle at $73.50, it now faces a strong resistance at $76. Only a breakout of this level would increase the chances for the contract to establish a fresh uptrend.

If such a breakout occurs, Brent futures can rally to $80.50, a potential barrier. A breach of this might turn the medium-term trend positive. Resistance above $80.50 is $86.

On the other hand, if the contract falls from the current level, it can find support at $70.50 and $68.50.

MCX-Crude oil (₹6,023)

The January crude oil futures rallied last week and closed above both the 20 and 50-day moving averages, a positive sign. However, it fell short of invalidating the resistance band of ₹6,025-6,100.

If the bulls can lift the contract above ₹6,100, the short-term outlook can turn bullish where the price can rise to ₹6,500. Resistance above ₹6,500 is at ₹7,000.

But in case the contract falls on the back of the supply zone of ₹6,025-6,100, it can find support at ₹5,850 and ₹5,680.

A break below ₹5,680 can drag the contract to ₹5,500, a key support. Subsequent support is at ₹5,000.

Trade strategy: Go long on crude oil futures if it breaks out of the resistance at ₹6,100. Place initial stop-loss at ₹5,850. When the contract touches ₹6,350, alter the stop-loss to ₹6,100. Liquidate the longs at ₹6,500.