Monday, December 3, 2012

Natural Gas: Elliott Wave Count

Natural Gas: Elliott Wave Count

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In today’s Commodity Report “The Commodity Waves short term update” we have shown Natural Gas wave structure in addition to views on Gold, Silver, Crude and Copper.

Natural Gas is one of the very volatile commodity but gives very clear wave count. In today’s report we have also shown how simple channel techniques applied on Copper has helped us to capture each and every turn over short term.

To know the trend in Gold, Silver, Crude, Copper in addition to Natural Gas you can subscribe to our daily research report by writing to

Natural Gas weekly chart:

MCX Natural Gas Daily chart:

Waves Analysis:

As shown above in Weekly chart of MCX Natural Gas, in the month of 2010 prices have formed top near 280 levels in the start of the year 2010, thereafter constantly for more than two years prices has been moving lower in the downward sloping red channel in a corrective fashion and made a low of 99.50 in the month of April 2012. Afterwards it has shown smart bounce and for third time it has retested the resistance of 220. Failed to move above this resistance level and once again it has started to move lower.

Looking at weekly chart we have observed in this commodity a corrective move rather than impulsive. Perfect channelized move indicates the formation of complex corrective pattern (W-X-Y-X-Z). Currently, prices have completed wave X near 220 levels and started the next leg on downside in the form of wave Z.

As shown above in daily chart of MCX Natural Gas, prices have exactly turned from upper end of the blue channel, consecutive from last three trading session it has closed below the previous day high, fell steeply and made a low of 195.30. Momentum indicator ROC exhibits the strong negative divergence. Altogether indicates the negativity for this commodity.

In short, 220 will act as a strong resistance over medium term. As long as prices sustain below this resistance our bias is negative and prices could move lower till the next support of 172/170 levels.

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