MCX Nickel has recently done a channelised pullback. Within the channel it formed a triangular pattern and broke out on the upside to form the third leg of the pullback. The pullback retraced 38.2% of the previous fall. From there it has started a fresh move down and has given a breakout from the channel on the downside. Below the channel the base metal has formed a bearish flag pattern and has given a bearish breakout in the last session. The daily momentum indicator is in a bearish mode. Thus the base metal is poised for a significant decline. The short-term target on the downside is the recent low (787.50) and the pattern target (776). The reversal can be tightened to 837.
Crude oil continues to oscillate about its crucial weekly moving averages. The oscillations are taking place in between two converging trendlines. In terms of the price pattern, the oil has formed a large distribution triangle. The oil has moved up to complete the last leg of the pattern. It has crossed the upper end of the pattern by a small margin, thus making a throw over. After the throw over, the oil in the last week has formed a bearish outside bar, thus marking beginning of the next leg down. Last week’s high of $99.01 will now act as a reversal level for the bearish view. Overall, the oil is expected to fall towards $85.61-$77.28.
The chart shows the price movement of MCX Lead (2ndmonth continuous chart). From the low of 105.2, lead formed a sharp rally. It retraced nearly 78.6% of the entire previous fall. However, near the key Fibonacci level, the bears opened a fresh round of selling. As a result from that key Fibonacci level, lead has started tumbling down once again. Thus, an upside, from a short- to mediumterm perspective, looks caped at the recent high of 128.90. The base metal is falling along with a short-term falling trendline. The reversal for the bearish view can be placed at 125 on a closing basis. The short-term target on the downside is at 115.5.
Silver had broken down from a bearish triangle and we see a clean five-wave decline. After a five-wave decline, we generally get a retracement of the five-wave decline as per the Elliott wave principle. In the last trading session, the white metal closed in the positive. It has also formed an engulfing bull candle stick pattern on the daily chart, which has bullish implications. The daily momentum indicator showed oversold readings and thus a bounce from current levels is on the cards. The bounce can continue up to $21.19, which is the 61.8% retracement of the fall and also the-20 day simple moving average, and $21.89, which is the 40-day exponential moving average. The level of $18.19 should act as a crucial support.
Relief rally for gold around the corner
After breaking down from the sideways consolidation,gold saw a sharp decline last week. The decline was a clean five-wave decline. After a five-wave decline, we generally get a retracement of the five-wave decline as per the Elliott wave principle. The daily momentum indicator showed an oversold reading, which indicates a near-term bounce is around the corner. In the last trading session, it broke out of the downward sloping channel. We expect gold to trade with a positive bias going ahead for targets of $1,331, which is the 61.8% of the fall, and $1366, which is the 40-day exponential moving average. The crucial support is placed at $1,180, which is the low it touched in the last trading session.
As can be seen from the chart, the fall from 135.70 to 122.25 has been retraced till the 61.8% retracement mark. Since the last few sessions, lead is trading near that key Fibonacci level. In spite of the multiple attempts made by the bulls, the bears aren’t allowing the price to move higher. The momentum indicators on various time frames are in the bears’ favor. On the downside the 20-daily moving average (128.70) and the 40-daily exponential moving average (127.5) are acting as crucial supports. Overall, lead is expected to fall towards the low of 122.25 with a potential to extend further down. The reversal for the bearish view can be placed above the recent high (131.70) on a closing basis.
(Disclaimer : The above chart shown is for study purpose only and not for trading decision) Read Full Disclaimer Here