Applying Elliott wave counts on commodity - Lead

Applying Elliott wave counts on commodity - Lead

By Waves Strategy Advisors, For more information visit www.wavesstrategy.com To subscribe to daily Commodity research “The Commodity Waves” write to helpdesk@wavesstrategy.com or call on +91 9920422202 / +91 22 28831358

Along with precious metals we have observed steep move on downside in base metals within last two months (January – February 2013).

MCX Lead is one of the base metals which has reversed exactly from the crucial resistance level and fell violently. Elliott wave counts worked precisely and helped us to capture the top in this commodity.

After a steep fall from 135 to 120 we have covered long term wave counts on MCX lead in our daily commodity research report on 14th March 2013. Here, we have mentioned for a minor bounce back towards 124. Prices have moved exactly as expected. After making low of 120 it has re-tested the resistance of 124, thereafter it has started the impulsive move on downside and currently quoting near 118 levels.

MCX Lead Daily chart:

Wave analysis:

As seen above in daily chart of Lead, in January 2013 prices have retested the previous high of 135 which was made in December 2010, later prices failed to sustain above this levels and fell steeply. In last two months (January and February 2013) we have seen sharp move on downside, prices have breached the strong support of 124 and moved lower till 120.

As per wave perspective, prices have breached the wedge pattern in last month (February 2013), completed wave Z of complex Corrective pattern (W-X-Y-X-Z) near 135 levels and started the next leg on downside. At present, it is moving lower in the falling channel (marked by blue color). Momentum indicator RSI arrived near the support of 30 where earlier it has bounced back from the same level. Hence, after a steep move on downside there is a probability of re-test of the crucial level of 124.

From Medium term perspective, combination of Elliot wave theory and wedge pattern break out suggested the end of correction on upside which has started from level of 40 made in the year 2009. Therefore, any attempt on the upside will be utilized as a selling opportunity with a risk management level of 124.

In short, as long as prices move below 124 our favored is negative for a move towards..…..

We cover MCX Gold, Silver, Crude and Copper along with Comex Gold and Silver in daily commodity report (The Commodity waves STU). To subscribe to this research visit www.wavesstrategy.com write to us athelpdesk@wavesstrategy.comor call us on +919920422202 / +91 22 288313588