Commodity Technical Analysis Adam Smith Associates
BSE Metal
The BSE Metals index
remains in a downtrend. The recent bounce back is facing resistance near the
averages and if we break the rising trendline of the 1 year long channel then
it would confirm that we head to 9500 on the index, a deeper cut in prices. A
move below 10897 could be negative.
Sugar NCDEX
The reason to be careful about Sugar prices international is that often
local agro prices do not move with the global ones in the near term. This is
unlike the metals where they move in tandem. So local sugar prices did peak but
did not fall with the global trend. But the wave counts still indicate lower
prices on the NCDEX chart, so it might be better to wait and see what happens
here before taking a stance on the sector.
Copper A False Break Out
The recent move up in copper was again an x wave. In many base metals I did
note that either an x wave or new move is on. But I did think the flag breakout
on copper could mean more. That is violated now. Copper is in wave z of 2. z is
the last wave of any structure. But how far lower can it go. 50% retracement
mark is at 2.45 and 61.8% is at 2.36. Both are open now.
Wheat CBT
Wheat at the CBT exchange - finally broke out of a falling channel [or
flag], and should be in a 3rd wave. A rising channel indicates the potential to
move to 490
Soy Bean
Soy Bean - broke the multi year neckline support at 2945. This puts the
bullish case at risk and you must consider the extreme bearish case as well. A
move below the recent low of 2760 would mean that Soy bean's triangle was a top
formation. The neckline measurement would point all the way down to the 2000
mark unless we can get back above the 2945 level. So there is considerable risk
given this break.
Sugar
Local Sugar prices are still to show wave C down complete but the Global
price chart is already at the 61.8% mark, Prices completed 5 waves in C down
and rebounded in the last two days. So it looks like the larger Wave 2 decline
is over and the next major wave up in sugar prices may resume out there. A
positive divergence on the RSI indicator may also be noted in the final waves.
Adam Smith Associates offers trade & commodity finance related services & solutions to its domestic & international clients. Views expressed in this article are purely of the author - Mr Rohit Srivastava - a leading technical analyst. Visit www.adamsmith.tv for services offered by Adam Smith Associates Pvt Ltd
