Commodity Technical Analysis

SUGAR CSCE

Global sugar prices are again rising. So wave 4 triangle appears ruled out. EWI was considering it and I waited for a while and now the price action of the months since July is a base triangle that is bullish. Prices are rising and a bottom may already be in place. Then we could be looking at a multi month rally in Sugar. We closed t at 15.13$ and a close above the 40 week average at 15.30 on a weekly basis would be good confirmation for a bigger move.

LEAD MCX

Most base metals are back into correction mode and the potential for a further rally appears to have deteriorated. So I was bullish on Lead and it did rally but halted at 78.6% retracement of w below and in 3 waves. So it is best marked an x wave. This takes me back to my initial thinking that the Oct top is wave 5 and we are in a more prolonged corrective phase till proven otherwise. In this case Lead could go back to 61.8% of wave 5 near the lower trendline at 147 for this expanding trading range.

ZINC MCX

Daily and weekly momentum for Zinc are in sell mode and all the moves since the Oct top are 3-3-3-3-3, and it now looks like a triangle. So resistance is at 215.80, and support at 206.50. Below 206.50  we could see a dip back to 190. Retracements are 187.25 and 180.40, at 50% and 61.8%

NICKEL MCX

Wrong, that is it, I thought wave 5 ended at a double top but then we broke out. The move to new highs ended in three waves, so it must be part of wave 5 [impulse = 5+4 waves ]. So wave 5 can now be marked at the high of 838 truncated in wave v of 5. We closed below the 20dma and can dip to 61.8% retracement at 730. If that breaks then the 20 week average is at 708.

GOLD

Gold formed a triangle and it appears to be taking support at the 1270 mark. So possible that we get a short term rally with the dollar falling. A move above 1288$ would indicate a rally to 61.8% near 1320. At this stage I still mark this as wave B and not the start of a new wave, though the long term outlook i bullish.

Commodity Technical Analysis

CRUDE

Crude Oil went past the 2017 high. Here I am considering the alternate scenarios developing. We are in either wave 3 or c up. the third wave will end in 5 waves and in that sense we are only in wave iii so Oil prices have way to go. One minor correction in between the next achievable level is near 62. 62 is the 2015 high and the trendline of the two tops seen since 2016. Near 62 we can consider which is the better case, but the Oil rally that has started now has a few more legs before it is done in either case.

Aluminium MCX

Aluminium prices closed above the 20dma taking support at 139.23 and unless we close above it the immediate bearish case should be held back. The dialy momentum has crossed back to the buy side so watch if it goes past the 142.70 high we might get a new rally. The parallel channel would then have resistance at 147.50 next.

LEAD MCX

As discussed Lead prices closed up above the 20dma which was at 141.415, and pushed the daily momentum into buy mode. 167.50 is the Upper bollinger band and next resistance.

NICKEL MCX

Nickel broke past the 785 mark to new highs causing extentions in what I thought to be a near double top. Implications are here. III=I points to 873, however the big jump in one day is wave i of III and iii=i points all the way to 910.

Gold

Gold spot closed just below the 20dma at 1281.50 and did not break the 1284.10 swing high. Both keep in tact the wave count that wave C down is unfolding. Below 1263 we head toward the 1200 mark

SILVER MCX

Silver had a bump up yesterday, that should be wave ii of c. Wave c will develop into a 5 wave decline and wave iii of c down should be next 61.8% retracement is at 39928, from where wave iii down can start. iii should head towards 37500, as it may extend up to 1.618 times wave i.

SUGAR NCDEX

Covering Sugar Ncdex after long [Rs./Quintal] and using a line chart. Why? the contract has suddenly become very illiquid. It has also not declined along with Global sugar prices. It did rise with them and traded a lot last year. Am not sure what has happened but now on many days there are no trades and the price is erratic. One day it was up from 3300 to 3700 and now on 30/10 it is back at 3310 on a single trade and has not traded for days. C=A is achieved [near the wave 4 support] but hard to say if this erratic structure is complete. So we need to watch prices in light of global prices for a while and see what happens.

RAPESEED

Rapeseed is rising and might continue to. Taking support at the longer term channel support prices are rising. Retracement levels are 4100, 4300 and 4500. 3830 is the 40dema and the immediate support holding which we are heading to higher retracements.

SOYBEAN QUITAL

Soy Bean Ncdex rallied in wave 1 and wave 2 maybe complete in A-B-C. If the recent low of 2754 holds we could be in wave 3 up and that would initially retrace 61.8% at 3080, and if that is surpassed then 3=1 could be the bigger picture near 3424. We have closed above the 20dma at 2870

Commodity Technical Analysis

GOLD MCX Daily

No change in trend or view here. A slow decline is on as the dollar rises. So the USDINR can support mcx prices even as comex prices fall but the bias is negative. The 20dma at 29563 should be the key resistance level.  Retracement levels are open at 50-61.8%

LEAD MCX

Lead Prices started to break down. They may close the month down today. This can mean that longer term we completed a 5 wave advance in a double top as shown on this weekly chart. Major support levels are 144-142 at the lower trendlines and the wave 4 swing low at 131.

ALUMINIUM MCX

A 5 wave rise done for Aluminium the next set of levels are at 135 and 131 as long as we are below the 142 mark. Below 131 we would have to be open to 120 as well.

COPPER MCX

Copper prices stopped short of a new high, so wave v of 5 was truncated. The first support is at 440 [40dema and trendline] and if that breaks we go to the wave 4 low near 417.

BSE METALS

The BSE Metal index has completed a 5 wave advance from the Sept low and possibly from the May bottom. With Base metal prices also giving up expect a deeper cut in metal stocks in the coming weeks as they give back some of the gains. Going back to the wave iv low is normal.

NATURAL GAS

Natural Gas for months is forming a triangle in what could be a right shoulder. The resistance line for the x wave is at 3.08, and the support is at 2.78, If 2.78 breaks we would head to 2.5-2.30.

Gold, Silver and Copper Technical Analysis

Silver MCX

Silver is in wave c down and c=a can point to 37608. The recent high for wave b is at 40632. Wave c may also extend lower to the 2 year trendline support that is closer to 36026. Wave c will be a 5 wave decline so till 5 waves down do not complete the move is not complete.

Copper MCX

Copper Mcx started minor wave v of 5 as a final push higher to a new high above the 466 high. Hard to put a number on how far it should go. But wave v of 5 should be final move for the last metal in the sector making a 5 wave advance.

GOLD Daily MCX

Gold was down and managed to push the daily momentum into sell mode. Gold Mcx closed very near the 40dema at 29571, below which gold should head to the lower Bollinger band at 29294. On weekly charts the 20/40 day averages are near 29090 as the next important support level. The weekly momentum also crossed over to the sell side as gold closed down for the week.

Commodity Technical Analysis Report

CRUDE MCX

Crude prices on Mcx would be in a triangle in wave B. The triangle started to form from the second quarter of 2016. Wave E of B is the final leg down for the triangle from the upper end near 3480 to the lower end near 2790 this should be the final leg of the consolidation phase before we make it to a higher ground.

GOLD

The internal wave count of the fall for gold has now become complex and so it is best to mark it overall as W. An bounce back will be an X wave.

LEAD & ALUMINIMUM

MCX was closed yesterday so using the CFD futures. Metals are mixed up with Lead [below] and Zinc in wave v of a rise, while Nickel Copper and Aluminium [below], at near term supports and bouncing up. So if 2080$ holds then we may go higher on Aluminium, but Lead is in wave v and can turn into a correction anytime.

CRUDE

I discussed the downside risk to crude Medium term yesterday however near term if the 50.20 support [20dma] holds, and maintains the rising channel shown on this chart, maybe wave v of C up is still on the cards. The wave i high of 49.42 has not overlapped and till that happens wave v can be kept open. Wave v of C then can still make an attempt at 53$.

COPPER MCX

Copper prices are lagging but slowly moving higher. The recent fall was 7 legs and a corrective decline. So one more move to the highs is possible in wave 5 of the rise. 429-425 are supports, and 451 near the wave 3 high or 465 to the upper channel line again are open. The Bollinger band at 445 would be an interim resistance.

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

 

4 Current Commodity Tips You Need to Know About

 

Commodities are an incredibly strong investment choice. A great way to build a diverse portfolio, they lack the volatility of stocks while providing great room for financial growth.

But investing in commodities without knowing what you’re doing is a bad idea.

If you want to make this investment, you’ll need to develop an intelligent strategy. Here are some commodity tips to help you make that move.

Commodities Explained

Before you read any other commodity tips, you need to understand the concept. Commodities are structured trades around the delivery, sale, import, and export of a particular good. Popular commodities include oil, gold, and soybeans.

The most popular strategy for investing in commodities is signing a futures contract. These ensure that you will own the commodity for a set amount of time before selling it on a certain date at a specific price.

Here are a few tips for making the most out of your commodity trades in 2017.

Why ETFs Are A Good Choice

If you’re looking for an effective way to invest in commodities, one of the best ways to do it is through ETFs. ETFs, or Exchange-traded funds, can either monitor a commodity or a specific market index.

ETFs can be a great way for beginners to invest in commodities. They are easy to manage and involve a lot less red tape than a futures index. While investing in ETFs is not the only way to make a profit off of a commodity investment, it is the best way to get acquainted.

How To Use a Short Position

Many have a strong preference for the simple game of going long on their commodities. But this can be a mistake. There’s a lot of money to be made off of the short sell, and it also isn’t particularly difficult.

If you detect a market depreciation, you should sell shares in a commodity. Let the commodity depreciate in value: when you feel it has bottomed out and will experience a resurgence in value, you should buy shares.

This will allow you to minimize the cost of purchasing valuable commodities while profiting off of purchases of a commodity at a low value. Every trader should stop worrying and love the short.

Read The News (Financial and Otherwise)

Commodities are very complex. But in a way, they can also be relatively simple to understand. As a matter of fact, indexes for every commodity from corn to currency will appear in the newspaper. And not just in the business section.

Staying on top of everything from policy to boardroom rumors can help you make the right decision. So devote at least an hour to the news each day.

Be An Oil Skeptic

Oil is one of the most popular commodities. And while it can perform well or poorly in various technical analyses, an essential part of risk mitigation involves taking a look at the international political environment.

Whether it’s through long-term transformations in the energy market or instability in OPEC nations, the future for oil is questionable. In the name of risk mitigation, we would advise approaching oil with caution.

Beyond Commodity Tips: Work With Us

Tips can take you far. But you can go even further by working with seasoned financial professionals.

We’re experts in various areas of trading. One of these areas is commodities trading. But whether you’re looking to succeed at the trading of commodity ETFs or to continue boosting an already thriving portfolio, we’re the best people to work with.

Contact us to take your trading strategy to the next level.