January 25, 2012, Gold: Standing on a cliff

Post the five wave decline formation, gold has bounced to retrace the impulse. With the bounce it has reached the 50% retracement mark and the falling trendline. The 20 week moving average (WMA) is also near the same region. In terms of wave structure gold has formed an ending diagonal in the third leg of the pullback. Itremained well within the cut off level for the pattern, which is $1,690. The daily momentum indicator is also showing loss of strength on the bulls’ side. The target on the downside is $1,545 (the daily lower Bollinger Band). On the other hand reversal can be kept at $1,682 on a closing basis.

Read more...

January 24, 2012: Nickel: Bearish developments

MCX Nickel has formed the third leg of the pullback and has reached the upper end of the channel. In terms of price pattern nickel has formed an ending diagonal which marks the end of the third leg. From the upper end of the channel nickel is being pushed down. The daily upper Bollinger Band is also putting pressure on the price. The daily momentum indicator is showing negative divergence and has given a bearish crossover. The 20 day moving average (DMA; Rs1,003) and the 40 day exponential moving average (DEMA; Rs987.5) are the immediate supports. Overall the upside looks caped at Rs1,040. The Fibonacci targets for the next move down would be Rs965 – 945 ie 38.2% and 50% retracement respectively.

Read more...