Monday, October 10, 2016

How long the current uptrend in Crude will last?

Riding the up move in Crude with the help of Elliott wave and Channels.

In commodity we have witnessed mixed performance in which Precious Metals lost its shine in current month and moved sharply lower whereas Crude has continued to move in range from medium term perspective. During the range bound action one can form buying strategy near support levels and selling near resistance levels. Apart from that application of Elliott wave can guide us for the probable pattern in formation. Elliott wave takes into consideration the nature of the up move and hence trend potential as well as maturity of ongoing move can help us in forming trading strategy. Below we have shown part of research taken from “The Commodity Waves Short Term Update” on Crude.

MCX Crude October60 mins chart: (Anticipated in the morning of 3rd October 2016)

MCX Crude October60 mins chart: (Happened on 7th October 2016)

Wave analysis:

(Part of research published in the morning of 3rd October 2016)

“Prices have given fresh breakout from the sideways to negative action of last few weeks. There is formation of bullish candlestick pattern with increase in momentum in last week which suggests that uptrend should continue as long as we do not see exhaustion signs.

As shown in 60 mins chart, as of now prices have completed wave c of Triangle pattern and wave d is ongoing. The acting of last session indicates that sideways action is ongoing and post these prices should move higher.

In short, on downside 3130 will continue to act as important support and move above 3240 will suggest that move towards 3300 has started.”

(Part of research published in the morning of 4th October 2016)

“Crude showed high volatility. Prices moved higher towards 3310 level however post that reversed on downside towards 3250 and made spike at 3310 level. During such volatility one should trade with strict risk management.

As shown in 60 mins chart, prices are intact in upward moving channel and prices have taken out previous wave (x) area with strong momentum. This will keep short term trend positive. However looking at the volatility some consolidation cannot be ruled out. On downside 3190 is the support.

In short, Crude trend is positive but trade with strict risk management. 3190 is the support. On upside prices can move towards 3350 level.”

Happened: We took a bullish stand on Crude as soon as 3200 was taken out with strong momentum. Post that prices managed to sustain above the pivot support areas and achieved our mentioned target of 3350 level. Will it continue to rally? What should be the trading strategy from here on?

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