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MCX-Crude oil contract extended its upmove breaking above the trendline resistance at ₹3,550 per barrel. However, the pace of the rally after the break above ₹3,550 is not strong. An intermediate dip to test ₹3,550 which is now the resistance-turned-support level is possible in the near term. A strong reversal from there will keep the broader bullish outlook intact. It will also keep the possibility alive for a test of the psychological ₹4,000 mark.
On the other hand if the contract breaks below ₹3,550 decisively, it may signal that the current rise above ₹3,550 is a false breakout. In such a scenario, a fall to ₹3,400 or even ₹3,350 is possible. On the global front, the crude oil futures contract on the NYMEX is hovering below the $54-$55 per barrel resistance zone.
A strong break above $55 will boost the momentum and pave way for a fresh rally targeting $60. Immediate support is at $52 and a strong support is at $50. The outlook will turn negative only if the prices decline below $50. But such a fall looks less probable at the moment.
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