Commodity Technical Analysis

Copper

Copper Quarterly momentum crossed over to the buy side as a positive indication. We still have to get over the quarterly averages at 2.73 and 2.84 for a larger move to 3.80 to develop.

Gold

Gold broke the neckline of the last several months at 1230$. The neckline measurement target coincides with the 78.6% retracement near 1160. However the rising trendline from the 2015 Dec bottom is at 1173. 61.8% is at 1188. That gives us two levels to watch for oversold readings and a trend reversal to capture the bottom in gold. 1188 and 1172-1160. It is normal for wave E to either be short or go below the lower line [causing a selling exhaustion] before turning around. Right now staying below 1232 is bearish near term.

Soy Meal CBT

Soy Meal prices made a double bottom near 292$, and broke out of the falling trendine for wave of 2. A bottom maybe now in place for a larger 3rd wave up to start. Initial hurdle is 330 at 61.8% of Y. Then the X at 354 after that we should be heading to a new high above 432.Failure to go above 330 and 354 can keep us in wave 2 by some alternate patters.

Silver

Silver hit the 20dma resistance at 16.90 and sold off. Staying below this level Silver would be in wave iii down to 15.52

Wheat CBT

After being bullish global wheat prices in my last update I was negative as prices reacted from the falling channel of the last few years. But we now have a breakout so it is best to stick to the original outlook. Wheat CBT should be in wave 3/3 up now. Staying above 470 the trend is up and the next two swing resistance levels are 524 and 615. The monthly Bollinger band is also near 500. So getting past the 500-524 range would expand volatility meaningfully.

Sugar CSCE

The relentless fall in global sugar may have ended. Wave v of C down was forming for a while and extending. Now it counts as a completed 5 wave decline and yesterday’s bounce gets the RSI out of oversold territory. The recent low is near the 2016 bottom seen in sugar so it is a good level to hold near 12.5$. This is also wave 2 down for the longer term. The next move up should mark the start of a 3rd wave advance in global sugar prices.

Coffee CSCE

Coffee prices bounced back from the oversold territory, meaning an RSI of below 30 on both the daily and weekly charts. The near term a falling trendline from the wave d high is at 131, so a move above 131 should be a final confirmation of a trend reversal. The quarterly chart below shows the big picture. The development of a triangle from 2010 onwards which is mostly wave B, and sets it up for wave C up a major new bull move for Coffee prices. Lets get a little imaginative here. If C=A is achieved over 5 years Coffee prices go to 700 from 125 now. That is quite crazy. The triangle breakout will be above 168. Note it is also possible that prices remain within the triangle for now and only go to 168 to come back to 120 again. So unless we breakout the triangle is still forming. For the year ahead however a move to 168 can be seen.

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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