Page 7 - 1411_Value Plus May 2016

CRUDE OIL: Bulls Love Fuel Crude Oil

CMP: ` 2982 (As on 03rd May, 2016)
Buy: ` 2982-2900
Target Price: ` 3230-3440
Stop-Loss: < ` 2800

Extending the relentless fall of 2014 and 2015 into Technically, prices are on a very important trend line support on
2016, Crude oil tumbled in January-February to daily chart. This trend line joints 0-B wave’s lower points and
levels last seen over a decade before. Prices breached is thus very crucial in deciding the overall run of the current
every possible support and it was only the price wave C. On NYMEX crude oil chart, one can also find the Gann
tag of $26 in mid February which attracted bulls, theory working perfectly through territories of squares. The
making them fall in love with the fuel of the fuels, support taken at $26 defines $25 (square of 5, stage I) as major
yet again. Since then crude oil has seen strong support whereas at present stage it has already crossed stage 2
rally and looking at the fundamental and technical at $36 (square of 6) and is heading for a 3rd stage target of $49
scenario, it seems that the current halt in form of (square of 7).
a small correction can be used to buy for higher
targets in near future. The ongoing tussle within We recommend buying in Crude Oil June contract at CMP
OPEC and between OPEC and non OPEC members Rs 2982 and on dips till Rs 2900 for targets in the range of
is likely to keep supporting prices. If OPEC imposes Rs 3230-3440. Maintain stop loss below Rs 2800.
any marginal increase in production, the same is
going to off-set with high demand met through non 7 ARIHANT CAPITAL ¡ MAY 2016
OPEC members. Further weakness in Dollar index
will also put a positive impact on crude prices.