Commodity Technical Analysis

GOLD

With gold near 1264.70, 66% retracement the rise is 7 legs. Now it is possible to consider that wave iii up started based on yesterdays discussion however with the dollar still due for a near term rally from oversold conditions consider that till 1264 is not surpassed we may see one last dip lower in Gold prices. Above 1264 we go to 1287 at the trendline of the tops from the 2016 high.

CORN CBT

Corn prices bottomed at the 66% mark and are quitely moving higher. Holding this level at 1780 long term we should be in the early stages of a new move higher. A new bull trend rather than a X wave is what I would think but far from over.

Copper

Copper prices to develop wave iv correction. RSI at 78 it is quite overbought. Forming a doji yesterday. Wave iv can be a 38.2% retracement back to 2.80$. It maybe a swift correction or possibly a more prolonged time wise pattern like a triangle.

Gaur Gum

Guar Gum – is in the early stages of a larger up move. So it seems after the recent price action. In my last post I thought the rally was a 4th wave and it went past the 2015 low overlapping it. So that option is out. The only best option is that a A-B-C bear market ended in 2016. The recent correction in prices is to the lower end of a rising channel and that support has held so far near 6578. The rising channel marks the early stages of a larger rise if it holds and means prices would go beyond the 8671 high to test the upper end of the channel at 9490. Breakout above the rising channel at 9490 would go to the next major swing high at 12900.

Silver

Silver – reached the upper Bollinger band at 16.82 and sold off. Staying below this level prices may start another decline back to 16.15 and then 15.50 and then 15

Turmeric

Turmeric completed an impulsive rally in wave i, after a dip in wave ii we should see wave iii. 7556 the recent high once crossed we go to iii=i, which can be between 9100-9800

Copper MCX

No body gets the commodity rally just like nobody got the dollar bear market so I take credit for both forecasts. Global copper prices hit a 52 week high in wave 3. So MCX prices also should be o that path. A minor wave iv correction may get followed by wave v up. larger degree 3=1 is at 475 so we have a long way to go.

Aluminium MCX

Aluminium prices formed a triangle and broke out on the upside. Wave wise minor wave iii started. Breakout of a falling channel is above 125. Support from averages near 122. iii=i points to 127.80. And the channel breakout target based on the size of the channel goes to 132.

Zinc MCX

Zinc prices ticked up yesterday, daily momentum indicators are still to confirm, but a 3 wave correction to the lower band is complete, so wave iii up mostly started. The overhead trendline from the previous top is at 188.8 as the first resistance followed by iii=i near 209. That is the easy part. The one hard to digest is that wave 3=1 at larger degree now points to 330. Wave 1 ended at 204.20, and a move above that would have the potential to go to as far as 330.

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

Commodities Technical Analysis

GOLD

Gold has its neckline of the lows [blue line], at 1238. So that is a key resistance level. Daily momentum did turn positive and prices broke out of the falling channel but some more signs are needed that the trend has changed to up for good.

Aluminium MCX
Aluminium rallied in 5 waves and retraced 61.8% at 121.70. Dipped to a low of 120.90. So these supports should help propel it into wave iii up iii=i points to 127.50

CRUDE MCX

Crude Mcx – is in wave c up. c=a goes up to 3200 however with wave c subdividing we can see it extend to higher rations. The x wave high near 3383, is 61.8% of the entire decline for the year. 50% is at 3257. Both are open levels that can be achieved in wave c

Silver MCX

Prices are edging higher with the 40dema at 38238 as the next resistance. I still think we can make one last dip in wave z that can test the lower channel line near 35000 a last time before a larger up trend can start. A move above 38238 however might mean that we have already bottomed out.

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

 

 

Commodity Technical Analysis

SOY BEAN NCDEX

Soy bean prices formed an expanding triangle near the 61.8% mark. Last time I wrote that a bounce can occur because of the triangle but as shown why not a bottom? Possible Wave Y is over. Either another X wave up retracing the Y or the start of a major impulse. The trend should be up as long as we are above 2650. Breakout of the triangle above 3035 to go to 3286

Copper MCX

Copper Closed the week down. Now 365 is the next support. Halting near retracements it is still possible that copper is within a larger corrective structure. The recent rally is not certainly impulsive. So if 365 breaks wee can see it go back to test the 353 low [below 2.62$ to 2.48$].

ZINC MCX

Base metals are showing a near term correction after Lead, Aluminium and Zinc look like completing near term 5 wave rallies. The indication therefore is of a positive trend ahead but after a pause correction or retracement. The size of a pullback is hard to say.

For Zinc below the 20dma at 173 is the immediate support. 167 is the 61.8% retracement mark.

CRUDE

Crude has fallen in 3 waves so far to 66% retracement. If the low of 43.65 is not broken we can start wave c up to 49.10 or higher.

Silver MCX

Reccent data from CFTC shows that bulls that were record long at the highs on Silver have given back almost all of their long positions. With sentiment at just 9% bullish we are at the fag end of the decline in gold and silver. The chart shows the falling channel for the price, that I published a while back. At yesterdays low we came close to the line and we may test it one last time in wave z down. The channel is at 35000. The RSI is also entering the oversold sub-30 range.

CORN CBT

Corn – Prices surged with the rest of the Agro prices on the international markets. Corn hit a new high as it starts a larger degree 3rd wave up. Wave 3 up points to 460 just based on 3=1. That is a normal non extended wave over 12 months.

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

 

 

 

 

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

 

 

 

 

Commodity – Technical Analysis

LEAD MCX

Lead broke past the 40dema in wave iii minor degree. Levels to watch are support at 137. 38.2% retracement at 144, 50% at 148 and 61.8% at 152

ZINC MCX

Zinc broke out of the falling channel at 165 which should act as a support and the next set of retracement levels are 172-177-182

COPPER MCX

Copper MCX – closed above the averages as they hold above the falling trend since FEB. Momentum turned positive and 362.80 is the recent low support and 385 is the next resistance

Wheat CBT

Touched the upper end of a falling channel after a corrective advance and thus is open to dropping again from 471 to the lower end of the channel near 300.

 

COFFEE CSCE

Coffee prices have not yet bottomed and had a big down day yesterday. So chances are they will slip to the neckline near 100. While this level held the last few times we need to watch this time. Agro prices in general are falling everywhere, in India and abroad and no stopping it yet.

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

 

Commodity – Technical Analysis

NICKEL MCX

Nickel has a ending diagonal pattern at the lows the lower end support is near 558. The breakout is above 575-579. Daily momentum crossed over to the buy side as a start, so keep an eye on the next breakout as it may mark a trend reversal from down to up

LEAD MCX

Lead tried to break the double bottom support at 132 but is back above it and momentum has positive divergences and a buy mode, so till this level holds the bottom for Lead Mcx maybe considered. A move above  the 40dema and Bollinger band would further confirm strength.

 

ZINC MCX

Zinc has made a comeback on momentum indicators and crossed the 20dma. The breakout of the falling trendline from the Feb high is at 166.50 above which we can be in wave 3 up next. Conservatively a channel breakout has a measurement target based on taking the height of the channel and projecting it above the breakout point. That gives us 185.

GOLD

Gold’s sell off yesterday makes sure that the May June rally was corrective in nature. Chances are growing that we are in a larger triangle. Initially we will test the internal trendline of the 2017 lows near 1228$, but if that breaks then a drop to 1170 cannot be ruled out. So we will watch what happens at 1228, and not preempt a bottom there. The larger triangel structure will be a very bullish set up for long term investors once complete. By July-Aug it could be done.

Aluminium MCX

MCX Aluminium prices moved up yesterday out of a narrow intraday range of the last few days. It was very close to the lower end of a channel near 119 and 38.2% retracement near 120. The move up would test the falling channel at 125.70. And a breakout above the channel would put us into wave 5 up to 140 [ based on 5=1]

SILVER

I have recently switched to bearish wave counts for the near term on gold and silver but that does not change the long term bullish picture. So Silver is in wave C down which is usually a 5 wave decline. Wave iii of C is in progress and could be extended. Wave C=A points to 15.24$. Wave iii of C may extend to 15.84.

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

 

 

 

 

 

 

 

 

 

Commodity – Technical Analysis

Gold is sitting on its 20dma at 1263, but it has witnessed a trendline break. So I want to highlight that there were two trendline breaks in the last year and both saw steep corrections in Gold prices. So maybe I need to be open to the idea that this break too can be one. Below 1263 we would go back to test the trendline of all the lows at 1226 once more. We are in FED week and the dollar index has very low sentiment so we should be prepared for a snap back rally in the dollar and a correction in gold if it happens. This will not change the long term picture but delays the immediate rally to higher levels. In fact if we do fall that far I would be open even to my April view that we can test the trendline of the bottoms formed since 2015 at 1164 one last time. A close below 1263 would be a starting point

Copper And Gold

Copper and Gold have been having an awkward relationship for a while. While most commodities move in the same direction with a lead lag, these two have lagged to the extent that it is looking like an inverse relationship. So while both are up over two years they do so in alternation. The chart should speak for itself. So with Copper breakout last week gold sold off and I wonder if that is a trend for now. The reason for this inversion could simply be the way inflation and bond yields have been swaying causing Real interest rates to swing both ways. That has a rather direct impact on this asset class. Falling real interest rates are bullish for gold and they rise on economic demand expansion.

Zinc MCX

No respite yet for most base metals. So after the recent bounce in Zinc from the 155 level that I anticipated are we in an up trend. I am forced to check hourly charts and the recent rise appears 3 waves and done so this means there is risk of breaking below the 155 mark

Then if I draw a wider channel around prices it can go down to 148 next.

Lead MCX

Lead MCX broke its swing low. Here each correction leg is equal in size so if the last one Z is also equal we can go down to 128.

Silver MCX

Considering an alternate scenario for Silver if it continues to weaken as it closed below the averages yesterday. What this suggests is that the larger correction in Silver is still going on and we will retrace 78.6% of the 2016 rally if C=A is achieved. This is in the range of 15.30-15.20$.

In MCX terms it will mean a retest of 36000 at the lower end of the one year falling channel

 

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

 

 

 

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