MCX Crude: Intermediate top formed near 5100?

MCX Crude has shown an exponential rise from the lows of 4600 levels. We have been using Elliot wave combined with moving averages and RSI indicator. This helps in increasing accuracy of capturing a particular swing.

Below is research published in our daily report “The Commodity Waves STU” wherein we successfully captured the move from 4980 towards 5050 levels.

MCX Crude Sep 60 min chart: Anticipated as on 11^th September (morning).           

    

MCX Crude Sep 60 min chart: Happened as on 12^th September (morning)   

 

     

(Below is the extract taken from Commodity report published in the morning of 11^thSeptember, 2018)

Wave analysis:

Anticipated:As shown in the hourly chart of MCX Crude, prices are moving in wave (g) of which minor wave a has completed on upside and next leg on downside in for of wave b is ongoing. So we can expect range-bound to negative movement in coming sessions. Only break above 4980 will turn the bias positive. In short, trend for Crude is at crucial juncture. Break above 4980 can take the prices towards higher levels of 5050 whereas move towards 4820 levels can be expected.

Happened: Prices have managed to give a break above 4980 levels indicating, completion of wave b on downside and made a high near 50.

To know what will be the next move and till how far the rally of wave c will be, subscribe to our commodity report “The Commodity Waves STU” which is published in the morning on daily basis. Also get to know about precious metals like Gold and Silver and base metal like Copper, Lead, Zinc etc.- Know more

Crude – Amazing pattern, Will it resume positive trend again?

Crude has been moving upward from the lows of 2800 and still ongoing. We have been using simple techniques likes bar technique and channeling along with advanced concepts of Neo wave – Elliott wave to catch the swings in either direction.

Below is the research which we published today in the morning in our report ‘The Commodity Waves STU’.

MCX Crude daily chart:

Wave analysis:

NYMEX Crude has managed to protect its low of 67 and move towards higher levels so as long as its pivot low of 67 is intact on downside bias remains positive and eventually a move towards 69 can be expected.

Diametric pattern – Daily chart shows amazing pattern from Advanced Elliott wave. Prices have completed wave (f) of Diametric at the low and now wave (g) on upside should start again. The internal structure and pattern is shown in morning daily research report.

As shown in hourly chart of MCX Crude, prices have broken its downward slopping red channel. Wave a has completed on upside near 4780 levels and we can expect a sideways to negative action in form of wave b. Break above ………. will drive the trend towards higher levels of ………… or higher levels.

In short, trend for crude ……………

Based on the above research we generated the calls given below:

16/07/2018-CRUDE FUT SELL BELOW 4816 SL 4846 TGT1 4804 TGT2 4771- Achieved Target1 & Target 2

17/07/2018-CRUDE FUT SELL BELOW 4620 SL 4650 TGT1 4608 TGT2 4575- Achieved Target1

The above research shows in depth application of Elliott wave along with indicators like Channels, Moving Averages and Relative Strength Index. Subscribe now to “The Commodity Waves short term update” and get an insight into Gold, Silver, Crude, Copper with detailed charts and crucial levels to watch.  – Get access here

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Is correlation between Nifty and Crude Oil a MYTH?

Crude is one of the highly traded energy commodities and keeping close watch on the same is very important. On media or business news channels we have seen many times that experts speak about the impact of Crude prices on Indian Equity Markets.

You may have heard that rising crude prices are bad for economy and thus it will have negative impact on stock market or falling crude prices are good for economy. These are the two important phrases which we have seen on media many times. However to be objective in the market, it is very important to look at the trend of each of these asset classes and also to understand if stock market is really moving on back of volatility of Crude or not!

Following is the research by Ashish Kyal, CMT published in Journal of Economics by National Institute of Banking Management (NIBM – Pune) and circulated across the banking industry.

Nifty and Crude Oil- Understanding the relation

We have placed both these asset classes in the same chart to understand the overall correlation. Here we can see that in the year of 2008 it was the Indian Equity Market which formed a top earlier and then after few months Crude followed the trend of Indian Equities and started to move lower. Post the same in the start of 2009 both these assets formed a low more or less in the same month. From the above chart it can be seen that high direct correlation existed from 2008 till 2010 between Nifty and Crude prices.

In the period from last quarter of 2010 to first quarter of 2011 there was an inverse relation during which Nifty showed sharp fall but Crude continued to move higher. 

From 2011 to the mid of 2013 Crude and Nifty both moved in tandem. This was the period where predictability would have become easier depending upon the trend of other asset class. However this relation fade away and then we witnessed inverse relation from mid of 2013 to the mid of 2015. This was the period when people came out with the frame that falling crude prices are good for Indian Equities. However after mid of 2015 Crude and Nifty both started to move lower.

The period from mid of 2015 to start of 2017 was period again with high correlation and it showed direct relation. Interesting thing to observe was that both these asset classes moved higher together. Isn’t it surprising to see this?

Case in point: From the above observation it can be said there are different periods in which Crude and Nifty had direct and inverse relation.  Here we can also see that period of direct relation was longer than that of inverse relation.

The above chart clearly shows that it is “Myth” that rising Crude prices have negative impact on Indian Equity Market. The fact is that both these asset classes have continued to follow their respective trends in which they existed.

Food for thought: If low Crude Oil prices are good for Oil Marketing companies like BPCL, HPCL, IOC which has showed exponential rise and has provided support to the Nifty in last few years. On the other side there may be a case that high crude prices can increase the profitability of companies like Oil India, ONGC, Reliance Industries which has one of the highest weightage on Nifty and Sensex and thus greater support can be expected from Reliance in coming years.

In short, judging the performance of Indian Stock Market based on Crude prices is not a good idea since there is no consistency in the correlation and thus one should follow objective technical tools to understand the overall trend.

Learn the application of above techniques on different markets – Equity, Commodity and Currency in the upcoming training on 21st and 22nd July in Mumbai and develop trading strategy. Know more here

Crude: Power of Inverse Head & Shoulder pattern combined with Neo Waves!

MCX Crude has witnessed a strong breakout above its trendline. The pattern identification is important to capture bigger swings. We have taken an extract from “The Financial Waves Monthly Update” which is showing a detail study on MCX Crude.

MCX Crude weekly chart:

In previous update MCX Crude published on September, 2017 we mentioned that, “Move above 3780 will result into minor move towards 4000 levels” BANG ON! Crude has moved as expected and made a high of 4100 levels.

The weekly chart is showing inverse Head & Shoulder pattern which indicates potential reversal on upside. The profit target of this pattern is the difference between neckline and the low of head which gives the target of …. levels, whereas conservative target is the difference between shoulder low and neckline which comes near ….. It is best to stay with the conservative target for now and we will evaluate it further once the first target is achieved.

Crude has completed an Extracting Triangle pattern completing wave (e) on downside. We can observe that the downward moving waves are becoming smaller from left to right i.e. wave (e) <wave (c) < wave (a) which indicates that the momentum was reducing on downside and the upside swings were getting bigger. Break above the (b) – (d) trendline in faster time confirms that an important low is in place for Crude near ….. levels which might remain protected for months to come.

In nutshell, Crude trend is positive. Prices can move towards the target of ….. levels. Further break above …….can take the prices towards …. a level which is the head target! So it is time to live with higher Crude prices but that does not mean equity markets will falter because of Crude as both these assets actually had more of positive correlation rather than negative. Interesting times ahead, stay tuned!

The above research shows the importance of Inverse Head & Shoulder pattern combined with Extracting Triangle pattern which brings out more accuracy in predicting the trade setups and to make good profits.

For detailed research on Nifty, Bank Nifty, Crude, EURUSD, long term stock pick and much more subscribe to our “The Financial Waves Monthly Update”

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 3^rd October 2016)

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

Wave analysis:

(Part of research published in the morning of 3^rd 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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