Wednesday, October 29, 2014

Is Crude really headed towards sub $70? Or is it time to take a break from short positions?

Crude has been in news for many weeks now after the sharp fall from $108 mark to current levels near $80. 
Now many traders are betting that it will head below $70 exactly at the wrong time. We have our doubts and the studies are indicating otherwise.
The blame is now put on OPEC for not taking corrective steps and keeping supply under check. But we believe it is more due to reduction in demand globally rather than supply pressure. Also it is only after the sustained selloff that fundamental news start kicking in to justify the trend. For a trader it is important to know the trend before rather than betting on news which is always later!
Now see the below chart of Crude and see for yourself why we think the downfall is in matured stage:
MCX Crude daily chart:
Below is the excerpt from “The Commodity waves short term update” published on daily basis in morning.
Crude has continued to trade with loss of momentum on downside. Many of the analysts and traders have started believing that Nymex Crude is going to drift towards $70 mark. However we beg to differ and think that Crude is in matured stage of down move and reversal should happen soon on upside. There are series of positive divergences but prices are yet to confirm. Move above $85 will be strong positive confirmation that the trend has reversed on upside.
Similarly, for MCX Crude the support is now at 4900 levels. Prices are simply drifting with loss of momentum and RSI is showing strong positive divergence. This increases the odds that we can see an upside reversal from here. However, positive price confirmation will be obtained only above 5120 levels.
In short, Crude is now at crucial juncture. Break above …………
It is also important to look at the short term hourly chart along with daily chart to understand the key reversal areas. To know more subscribe now to this daily research report and see yourself where is Gold, Silver, Crude and Copper are headed from here. Most commodities are now at very important levels. Do not miss the next big trend which might be about to emerge. For more details visit the  or Contact us at +91 22 28831358 / +91 9920422202

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