Increase in US rig count has again given bears some edge and we saw crude trading negative at the start of the week. But Crude oil since then has recovered on the back of OPEC monthly report that Saudi Arabia is willing to cut its production of 5,00,000 barrels per day above its production cut quota. Fall in US inventory is also helping crude manage some gains. Crude has broken the resistance of $62-$63 so we expect Crude now to test levels of $66-$68. In MCX, Crude has multiple resistances in area around 3900-4000. Any strong boost will come above 4000.
TARGET: Rs 148
Stop loss: Rs 139
Lead on the daily chart has taken support at its 38.2% retracement taken from its swing high of 153.50 and low of 135.30. Increase in cancelled warrant and support from retracement does indicate that we may see a bounce in Lead. Lead also has taken support and is trading above its 50DMA which again further confirms a positive trend. RSI_14 has reversed from 45 levels so we would recommend long with expected move till 148 and stop loss of 139 closing basis.
Buy Natural Gas
TARGET: Rs 200
Stop loss: Rs 178
Natural Gas is trading at July 2018 low i.e. at the low before winter started. Now the injection season will start soon but Natural Gas is deeply in oversold territory and we are expecting some bounce from the current level. Selling pressure has clearly exhausted as it is now consolidating near 182-185 range. RSI_14 has reversed after being in an oversold region so we are recommending long with a target around 200 and stop loss below 178.
Disclaimer: The analyst may have positions in any or all the commodities mentioned above.