The adjacent chart shows the price movement of MCX crude oil continuous contract. Recently, the oil witnessed a sharp bounce after the multi-month correction. It broke out from the medium-term falling trendline. First leg of the bounce retraced 50% of the fall. From thereon the oil is forming a minor degree correction and is testing the key daily moving averages. It has a potential to form a triangular pattern, which will be a bullish one. Once the minor degree correction is over, the oil can start its next leg on the upside. The short-term momentum indicators are in a bullish mode. A key support zone on closing basis will be Rs2,921-2,880. On the higher side, an immediate resistance is at Rs3,095. Once that is crossed, Rs3,260–3,425 will be the target zone from short-to-medium term perspective.
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