The daily chart of MCX Crude Oil presents a compelling technical picture showcasing a bearish trend. After reaching a low of 5755 last week, the price witnessed a pullback towards the 6000 breakdown level. This pullback confirms the selling pressure remains strong despite the recent correction.
The descending triangle pattern on the chart further strengthens the bearish sentiment. The price has broken below the support of the triangle and the previous swing lows, indicating a potential continuation of the downward trend.
The Relative Strength Index (RSI) oscillator also supports the bearish view. Although it has recovered from the oversold zone, it currently remains in the mid-level, suggesting that the selling pressure is still present.
Based on the above analysis, the following key support and resistance levels are identified:
Support:
- Immediate support: 5850
- Subsequent support: 5750
Resistance:
- Immediate resistance: 6100
- Subsequent resistance: 6150
Trading Strategy:
Considering the current technical analysis, the following sell on rise strategy is recommended for MCX Crude Oil:
- Entry: Sell near the resistance level of 6100/6150.
- Stop-loss: Place a stop-loss order above the immediate resistance level, around 6170.
- Target: The initial target is the immediate support level of 5850. Consider adjusting the target further down to the subsequent support level of 5750 if the price momentum remains strong.
- Exit: Exit the trade if the price closes above the immediate resistance level, potentially indicating a reversal of the trend.
Note: This is only a suggested trading strategy based on technical analysis. Always conduct your own research and consider your risk tolerance before making any trading decisions.
Additional Notes:
- The overall bearish sentiment in MCX Crude Oil is likely to persist until the price manages to break above the resistance levels and close above the descending triangle pattern.
- Keep a close eye on any fundamental news or economic data releases that could significantly impact the price of crude oil.
- It is important to manage your risk effectively by using proper position sizing and stop-loss orders.
