Understanding long term structure of Natural Gas
with the application of Elliott wave, Channels, Moving average and RSI.
It is not only precious metals which have shown
sharp rally in the year of 2016 but along with this energy commodities have
also shown relief rally.
The movement witnessed since start of 2016 again
reflects that how majority can be at wrong side when trend is due to reverse.
In the month of February 2016 WTI Crude was trading at $26.06 and post that it
sharply recovered towards $51 level. The gain of more than 100% when majority
was expecting Crude to move lower towards $10 level. The same is the case with
MCX Natural Gas which has rallied from the low of 110 to 202 level in last few
months. So what it suggests for Energy Commodities from medium term
perspective? Understanding the trend of any asset class is important with
objective technical tools, so that one can prepare himself for the next trend.
Below research we have taken from “The
Commodity Waves Short Term Update” dated 20th September 2016 on MCX Natural Gas.
MCX
Natural Gas weekly chart:
(Part
of research taken from “The Commodity Waves Short Term Update” dated 20th September 2016)
Wave
Analysis:
“Post the underperformance of last few years, in
the current year of 2016 finally some relief sign was witnessed in Energy
space. Crude has shown recovery from the low of 1800 and as of now moving in
consolidation whereas Natural Gas bounced back from the important support of
110 and sharply moved higher towards 202 level in last few months. This is
suggesting that underperformance is complete and in next few months we can
witness uptick in this commodity. Let us understand the long term chart of
Natural Gas.
The weekly chart indicates that in the year of
2008 in which Financial Crisis began prices made important top at 600 level and
since then correction is ongoing. This correction is forming complex correction
pattern (W-X-Y-X-Z). Recent bounce back is witnessed from the zone which was
seen in 2009. It is interesting to see that ignoring the news or events prices
respected the support area and sharply bounced back.
Prices have retraced the last leg of down move in
faster time. This is indicating that intermediate wave Y has completed at the
low of 110 and recent rise can be in form of intermediate wave X of complex
correction pattern. Price action from medium term perspective will provide
further clues for the same. 20 weeks Exponential moving average which acted as
resistance in 2015 is now providing support. This is as per polarity rule of
reversal. Post the sharp rise some consolidation is ongoing from last few weeks
and post the same prices should move higher towards 250-260 zone where blue
parallel channel is placed.
(60 mins chart is removed purposely which is shown
in original research report)
As shown in 60 mins chart, the rise from 110 to
202 is impulsive in nature which completed minor wave (a) and post that minor
wave (b) is ongoing. This wave (b) is intact in red downward moving channel and
as of now prices are trading at the resistance of the same. We require move
above 205 followed by 208 to confirm that next leg on upside has started.
Unless that happens sideways to negative action can continue.
In short, 205 and 196 is the short term range for
Natural Gas. Break of either of these levels will start short term trend in
that direction. From medium term perspective, 170 is the crucial support.”
“The Commodity Waves Short Term Update” includes daily research on Gold, Silver, Crude and Copper and Lead, Zinc,
Natural Gas on alternate weekly basis with Elliott wave counts. For
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