Commodity – Technical Analysis

Rough Rice CBT

International prices of Rice are due to start higher. Now I have said that for 2 years. Prices did not fall below the 9$ mark much but spent this time forming an ending triangle in wave Z that is the last phase of a consolidation long term. So now that prices have broken out of the wedge we should be well on our way into a third wave for Rice that should eventually go past the wave 1 peak of 24$. The breakout from the trendline is above 13$.

 

Cocoa CSCE

Cocoa prices have bottomed near the 1880 mark twice before and moved up by nearly 70%. So with the daily RSI showing positive divergences, the monthly RSI developing a possible positive divergence [closing tonight], and from the oversold territory as seen below, chances are we have a bottom in Cocoa longer term. Recently we made a higher bottom in the short term prices move as the first sign of a trend. Cocoa the key ingredient to Chocolate is going to move up again. It could be the start of a 3rd wave for the Long term so this time it may even go higher

US Steel

I have used the US Steel chart many times [even before the launch of the new site], to state my view on the metals sector. So In Feb of 2016 for the first time I published it here showing the completion of 5 waves down in wave C and thus a bottom in the metals sector. This was against everyday falling metals stocks back home. So more recently we have not seen a big correction in domestic metals stocks even as metal prices have corrected. The US Steel chart shows that the stock went from 6$ to 40$ in what maybe only wave 1 or A of a larger advance. We have seen a correction to 66% retracement in wave 2 or C down. What should then follow is wave 3 or C up next. C=A goes as far as 120. The rising channel below has room till 70$. And we recently bottom near 18.55. Till we hold these lows and this key retracement mark the trend for the metals should again be up. This should be important.

Sugar NCDEX

Local Sugar prices have not fallen yet along with global prices. A parallel line for wave B puts the resistance at 3900. Till we are below it we should still anticipate wave C down. The channel support is at 3625 below which wave 4 of lower degree is at 3350. And if the fall is deeper then 61.8% of the entire sugar rally is at 2775

NCDEX Future Index

The NCDEX Future index closed the month near the 40 month average. After a 5th wave it should go still lower in the months ahead back to the wave 4 area near 2119, from 2807 currently. So no early bottom in Indian Agro prices yet.

Copper

Commodities have been mixed. Copper below appears stable. So do lead and Aluminium. Nickel still keeps falling and Zinc is seeing deep retracements. Copper is holding the 20dma and the daily momentum remains in buy mode so it is giving positive signs. 2.54 is the 20dma as the support and unless we close below that the next move higher should unfold.

Gold

Gold broke out of a tight range seen for the last two weeks. On weekly charts however this was the 4th positive week. We are in a larger 3rd wave up that has the implications of going past the 1295 mark all the way to 3=1 near 1400$ in this move.

Crude

Crude stopped at the 61.8% mark for the day. Now we need to see if 46.7 holds as a support and if it does then we are heading towards c=a near 55.50, and if it overshoots then the trendline of all the highs for the last two years is at 58.50

Adam Smith Associates offers trade & commodity finance related services & solutions to its domestic and international clients. Views expressed in this article are purely of the author – Mr Rohit Srivastava – a leading technical analyst. Visit www.adamsmith.tv for services offered by Adam Smith Associates Pvt Ltd

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