Commodity technical analysis adam smith associates
Silver
Silver is lagging
gold on the way up. At some point that can change. Right now the large CFTC
positions are working on putting pressure near term but are also indicative of
the longer term interest in the metal. The 20dma at 18.10 is an important
support to watch and below that 17.70 would be the next in case prices dip
further. Silver can react as the base metals are selling off and so could lag
gold in the short term. It may catch up later.
Here is the gold silver ration chart when it clearly indicates a break down
in the ratio meaning that silver starts to outperform gold longer term. However
in the short term that has stopped happening. The ratio is going sideways. I
will note when it makes a new low.
Soy Bean
Not much has happened since my last post on Soy Bean. The positive
divergence on RSI is maintained and momentum indicators have crossed over to the
buy side. The important support remains the lower end of this potential
triangle at 2830. 2951 and 3115 are the 20/40 day averages, a close above both
would strengthen the bullish case that wave 5 up is starting to head towards
4070 and then breakout higher.
Copper
Copper prices have
fallen to the weekly 40wema and lower Bollinger band support near 2.49$. Weekly
momentum cycles are complete with the reading below zero. The set up is perfect
for the start of wave 3/C if we hold this support. Implications are that wave
3/C up would go to 3.374$, based on simply 3=1
Lead MCX
Lead sometimes relates well with copper and C=A was achieved near the lower
end of the falling channel from the wave 5 high. So can it have bottomed as RSI
was also oversold yesterday. If 136 holds we should consider it. Resistance at
148 and breakout from the channel above 151. Will comment again as momentum
indicators confirm
Crude
Crude had a big down day. So I have reworked the wave count a bit to
complete a 5 wave rise at the recent high. We have retraced 50% and the 20dma
is a critical support at 50.78 on a closing basis. If held the trend should be
considered to still be positive. A retest of the high at 53.76 could be on the
cards again. Above that we would have to consider a new wave to 57.70.
Aluminium Mcx managed to hold the triple bottom support at 121 and closed
above the 20/40 day averages. Breakout from the triangle is above 127. That
would indicate new highs above 130.60 up to 135.
Gold
Gold corrects in 3 waves and closed marginally positive. Wave iii up to 1327
should be next.
Coffee
Coffee prices have
been correcting in wave 2. I did think wave 2 wad done but apparently not. So
we are no breaking down into wave C of 2. This is going to get deeper before
wave 3 up can start. Support is at 118 from the trendline of the lows, also C=A
is near 119. And we are at 131. So it could go down to 118 in the coming months
to complete a 5 wave decline in wave C before we can start up again
Lead MCX
I did not cover Lead Mcx among the metals for its downside. In case of lead
the 5th wave appears to have ended as a truncation. Meaning that wave 5 did not
make a new high above the 3rd wave. Otherwise 5=1 was achieved. 61.8% of the
entire pattern is at 130 and we could see that level put to test in the
coming days.
Adam Smith Associates offers trade & commodity finance related services & solutions to its domestic & 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
