VIEWS FOR THE WEEK STARTING FROM 14TH DECEMBER 2009

SPOT GOLD ::

Traders holding short positions can maintain a stop loss of 1147$.

Sell on rise to 1122$-1135$.

On further fall below 1115$, the slide can get down towards 1101$-1088$.

 

SPOT SILVER ::

A trend line breakdown is visible as mentioned last week about the rising wedge.

RSI has moved down below 40. Any recovery in price an RSI moving above 40 can bring about a pullback rise of the fall from 19.43$ to the immediate recent low.

Traders holding short positions can keep a stop loss of 17.6$.

Sell further on fall below 16.87$ with high of the day stop loss

 

NYMEX NATURAL GAS ::

Resistance will be at 5.31$-5.38$.

Expect further upside momentum only on breakout and close above 5.38$.

Traders holding long positions can take profit or keep a stop loss of 4.83

 

NYMEX CRUDE ::

Hold short positions with a stop loss of 71.5$.

Sell on rise to 70.2$ or above with a  stop loss 71.5.

On further slide below 69$, lower level of 65$ could be tested.

 

 

MCX GOLD TRADING STARTERGY:-

The 50% retracement level has been tested which was at 16912. The low registered on Friday was 16883.

Expect further slide on fall and close below 16883. If that happens then expect a slide towards 61.8% retracement which is at 16572.

Traders who are a holding short positions can keep  a stop loss of 17284 to hold short

MCX SILVER TRADING STARTERGY;-

Traders holding short positions can keep a stop loss of 27624.

Support is at 26806.

Sell on fall below 26800 with high of the day stop loss or 27624. Buy on rise above 27623 with low of the day stop loss

MCX Gold Feb: Resistances at 17076/17121 followed by 17197 levels to cap for 16893 or
even lower towards 16711.Unexpected rise above 17230 to drag prices higher towards
17348/17380.   S1: 16885 S2: 16803 R1: 17045 R2: 17125.

---

MCX Silver March: Resistances at 27566 followed by 27770 now. Resistance to cap for a
decline towards 26450/26540.Rise above 27770 to result in a pullback towards 27434/28513.
 S1: 26915 S2: 26785 R1: 27175 R2: 27305.

---

MCX Copper Feb: Fall below 320 to result in a fall towards 307.60/309.70 levels.
Rise above 326.25 on the other hand could drive prices higher towards 330.40/333.50. 
S1: 319.80 S2: 315.80 R1: 327.80 R2: 331.80.

---

MCX Crude Oil December: Resistance near 3311/3333 or maximum 3395 could cap advances for
further decline towards 3195 (strong support).Below 3161 it could slip towards 3150 or
3069 also.Favoured view is bearish while below 3475.S1: 3218 S2: 3178 R1: 3298 R2: 3338.

---

MCX Zinc Dec: Dips to 106.50/106.0 levels to find support for a move higher towards
 108.70 levels.Fall below 104.75 to negate this bullish view.   
 S1: 106.00 S2: 104.90 R1: 108.00 R2: 108.90.

---

MCX Lead Dec: Dips to 106.50/106.00 levels to find support for a move higher towards
108.70 levels.Fall below 104.75 to negate this bullish view.   
 S1: 106.00 S2: 104.90 R1: 108.00 R2: 108.90.

---

MCX Nickel Dec: Dips to 774 / 772 to find support for a move higher towards
797/810 levels.Fall below 760 to negate this bullish view. 
 S1: 770 S2: 760 R1: 791 R2: 802

---

MCX Natural Gas Dec: Dips to 240/238 to find support for a move higher towards
261 levels.A fall below 232 is needed for stronger correction.  
S1: 238 S2: 233 R1: 245 R2: 248

EXPECTATION OF COMEX GOLD SILVER CRUDE FOR THE WEEK AND NEAR TERM OUTLOOK FROM NITESH JAIN

Comex Gold (GC):-


Gold's fall from 1227.5 extended further to as low as 1110.2 last week and the break of 1130.1 support, as well as the sustained trading below the near term channel, indicates that rise from 931.3 has likely made a top already. Initial bias will remain on the downside this week as long as 1148.4 resistance holds. Further decline should be seen to 50% retracement of 931.3 to 1227.5 at 1079.4 next. On the upside, above 1148.4 will turn intraday bias neutral and bring recovery. But upside should be limited below 1227.5 and bring another fall to continue the correction.
In the bigger picture, rise from 681 is expected to develop into a set of five wave sequence with first wave completed at 1007.7, second wave triangle consolidation completed at 931.3. Rise from 931.3 is treated as the third wave and has possibly completed at 1227.5 after missing 100% projection of 681 to 1007.7 from 931.3 at 1258. Deeper pull back could now be seen to 1026.9/1072 support zone, or even further to retest 1000 psychological level. But downside should be contained well above 931.3 support and bring up trend resumption.
In the long term picture, rise form 681 is treated as resumption of the long term up trend from 1999 low of 253 after interim consolidation from 1033.9 has completed in form of an expanding triangle. Next long term target is 100% projection of 253 to 1033.9 from 681 at 1460 level. We'll hold on to the bullish view as long as 931.3 structural support holds.


Comex Silver (SI):-


Silver's fall from 19.50 extended further to as low as 16.90 last week. The break of 17.70 support confirms that rise from 16.12 has finished at 19.50 already, just ahead of 19.55/21.44 resistance zone. Initial bias will remain on the downside this week as long as 17.64 minor resistance holds and further fall should be seen to retest 16.12 support next. On the upside above 17.64 will turn intraday bias neutral and bring consolidations. But recovery should be limited well below 19.50 and bring fall resumption.

In the bigger picture, the case of reversal continued to build up last week. The break of 55 days EMA and near term trend line support suggests that rise from 12.435 has completed at 19.50 on bearish divergence condition in daily MACD, after just missing 19.55/21.55 resistance zone. This also serve as the first signal that whole medium term rise from 8.4 has finished too, with weekly MACD back below signal line. Outlook is turned bearish and deeper decline should now be seen to next trend line support at 13.8 level and sustained break there will confirm this medium term bearish case and bring further fall towards 8.4 low.

Also, note that whole medium term rise from 8.4 is is treated as part of the long term, wide range, consolidation pattern that started at 21.44 back in Mar 08. Hence, even in case of another rise, upside is expected to be limited inside this 19.55/21.44 resistance zone and bring another medium term fall.

In the longer term picture, the up trend from 01 low of 4.01 topped out at 21.44 and subsequent price actions are treated as correction/consolidation to this up trend. Fall from 21.44 completed after drawing support form 8.5 key level. However, subsequent rally from 8.4 is not displaying a clear impulsive structure and hence, we'd prefer the case that it's just the second wave of the wide range consolidation pattern. Another medium term fall should still be seen for retesting 8.5 before completing the consolidation. Nevertheless, strong support is still expected at 5.45/8.5 support zone to conclude the consolidation



Nymex Crude Oil (CL):-


Crude oil dived further last week and closed below 70 level at 69.87. Break of the medium term trend line support serves as another indication of medium term reversal. Initial bias will remain on the downside this week for 65.05 support first. On the upside, above 71.50 minor resistance will turn intraday bias neutral and bring recovery. But upside should be limited well below 79.04 resistance and bring fall resumption.
In the bigger picture, we're favoring the case that medium term rise from 33.2 has completed at 82.0 with bearish divergence condition in daily MACD. The break of medium term trend line support last week affirms this case and should pave the way to 58.32 cluster support (50% retracement of 33.2 to 82 at 57.60) for confirmation. As noted before, rise from 33.2 is treated as part of the correction pattern that started at 147.27. Firmed break of 58.32 support will argue that the down trend from 147.27 might be resuming for another low below 33.2. On the upside, break of 79.04 is needed to invalidate this view, otherwise, outlook will remain bearish.
In the long term picture, there is no change in the view that fall from 147.27 is part of the correction to the five wave sequence from 98 low of 10.65. While the rebound from 33.2 is strong and might continue, there is no solid evidence that suggest fall 147.27 is completed and we're still preferring the case that rebound from 33.2 is merely a corrective rise only. Having said that strong resistance should be seen between 76.77/90.24 fibo resistance zone and bring reversal for another low below 33.2 before completing the whole correction from 147.27.


Nymex Natural Gas (NG):-


Natural gas rose to as high as 5.375 last week and the break of 5.318 resistance argues that rise from 2.409 is possibly resuming. Initial bias remains on the upside this week and further rally will remain in favor. Sustained trading above 5.318 will pave the way to next short term target at 61.8% projection of 2.409 to 5.318 from 4.157 at 5.955 next. On the downside, however, a break below 4.837 support will indicate that recent consolidation is still in progress inside and another fall should be seen towards lower side of recent range near to 4.157. But after all, we'd expect downside to be contained there and bring an eventual upside breakout.
In the bigger picture, medium term fall from 13.69 is treated as part of the long term consolidation pattern that started at 15.78 back in 2005 and might have completed at 2.409 already. Rise from 2.409 should not be completed yet and we would continue to anticipate an upside breakout of the recent range of 4.157/5.138 eventually. Above 5.318 will target 38.2% retracement of 13.694 to 2.409 at 6.72 and beyond. Nevertheless, break of 4.157 support will dampen this bullish case and turn outlook mixed again

VIEWS FOR 9TH DECEMBER 2009

Mcx Gold FEB;Resistance at 17550 to cap initially for a fall lower towards 17150-16740  levels now. Break of 17570 can negate this bearish view S1;17200 S2;17050 R1;17460 R2;17570

 

MCX Copper Feb: Important support is at 325.30 and break below could lead to a huge fall.  Initial supports are at 320.20/322.20.Resistances are at 331.50/332.60.  S1: 323.25 S2: 319.25 R1: 331.25 R2: 335.25.

 

 

MCX Crude Oil December: Important support is at 3408/3410 and a break below to test  3257/3260.Resistances are at 3473 followed by 3509. S1: 3393 S2: 3353 R1: 3473 R2: 3513.

 

 MCX Zinc Dec: While below 109.30, expect prices to dips towards 105.60 / 105.00  levels.  S1: 106.70 S2: 105.60 R1: 108.60 R2: 109.70.

 

MCX Lead Dec: While below 108.00, expect prices to dips towards 104.80/105.00 levels. S1: 106.2 S2: 105.10 R1: 108.10 R2: 109.30.

 

 MCX Nickel Dec:  Break of the range 770/730 to decide next directive move.   S1: 746 S2: 734 R1: 767 R2: 779

 

MCX Natural Gas Dec: Supports at 236 -234 to hold dips for a rise unto 247 levels. All fall below 232 to take price lower towards 224.   S1: 235 S2: 232 R1: 242 R2: 245

 

MCX Mentha Oil Dec: Fall below 600 has turned picture bearish. Rallies to 602/ 607  to find resistance for a fall lower towards 572 levels.A direct rise above 624 to  negate this bearish view. S1: 580 S2:570 R1: 600 R2: 610

 

 

SPOT GOLD:-Support of 1135$ was violated yesterday and it closed below it as well.

The 14 day RSI is falling as well on the breakdown after the negative divergence.

Resistance will be at 1140$-1156$-1169$.  Lower range of 1111$-1095$ can be expected

 

SPOT SILVER:-A negative divergence on RSI and rising wedge formation has been witnessed.

A breakout down of the trend line has been witnessed.

Traders short can keep a stop loss of 18.35$.

Expect further selling pressure below 17.5$. Subsequently, lower range of 16.98$-17.27$ could be tested

 

NYMEX CRUDE:-Sell on rise to 73.1-73.7$ with a stop loss of 74.4$.

Expect lower range of 70$-69$ to be tested

 

NYMEX GAS;-A wider sideways movement is being witnessed in the band of 5.32$ to 4$.

A good up move yesterday can take on the resistance of 5.19$-5.32$.

A breakout and close above 5.32$ can see a rally in Gas.

Support will be t 4.64$-4.58$

 

SILVER MCX TRADING STARTERGY ::

Negative divergence on RSI is in place therefore broad outlook for immediate near term can be to exit pending stuck up long positions. Only a breakout and close above 29780 can put Silver back on track for upside momentum.  Any rise overall will make a lower top.

Trend line breakdown situation has been witnessed yesterday.

Exit long on rise to 28165-28429 as the opportunity arises.

Sell on rise to 28165-28429 with a stop loss of 28542.

Expect lower range of 27788-27524 to be tested.

On close below 27800, the slide  can continue with lower top and lower bottom formation

 

MCX GOLD TRADING STARATERGY ::

Exit long positions if any on rise to 17492-17601 range as the opportunity arises.

Support will be at 17205.

On fall and close below 17200 the slide momentum can get aggravated.

Traders can sell on rise to 17492-17601 with a stop loss of 17694.

The 14 day RSI is falling at faster pace. If it moves in the oversold zone first then it will mark that the near term high will be the peak for some time.

Volumes have got higher at the upper end. If 17200 is violated all heavy volumes will be left on the upside indicate a reversal of the rising trend and a bull trap

VIEWS FOR 8TH DECEMBER 2009

MCX Gold Feb: Dips to 17349/17364 to hold for a pullback towards 17712/17862.
This is our favored view. Fall below 17213 could cause doubts on our bullish view.
 S1: 17466 S2: 17386 R1: 17626 R2: 17706.

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MCX Silver March: Supports are at 28255/28300 for a pullback towards 29125/29157 or
even higher towards 29250.Fall below 28099/28146 to dent our bullish exp.
S1: 28342 S2: 28212 R1: 28604 R2: 28732.

---

MCX Copper Feb: Rise above 328.20/329.50 to increase our bullish expectations
 towards 331.25 or even higher towards 332.40/333.40 or even higher.Important support
is at 323.05/324.10, a break below this level to negate the bullish view.
S1: 325.70 S2: 321.70 R1: 333.70 R2: 337.70.

---

MCX Crude Oil December: Resistance is at 3487 followed by 3548/3550. Move above 3550
 to lead to a rise towards 3625/ 3643. S1: 3455 S2: 3415 R1: 3535 R2: 3575.

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MCX Zinc Dec: While above 106.30, expect rallies to target 109.20 /110.0 levels.  
 S1: 106.40 S2: 105.50 R1: 108.50 R2: 109.70.

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MCX Lead Dec: While above 105.50 levels expect rallies to target 109.60/110.0 levels.
  S1: 106.2 S2: 105.10 R1: 108.10 R2: 109.30.

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MCX Nickel Dec: While above   737 expect rallies to target 770 levels.
S1: 746 S2: 734 R1: 767 R2: 779.

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MCX Natural Gas Dec: Supports at 227/225 to hold dips for a rise unto 241 levels.
All fall below 221 to raise doubts on this bullish view. S1: 227 S2: 223 R1: 237 R2: 242

 

INTERNATIONAL SPOT GOLD ::

Support has been witnessed yesterday at the last week’s low of 1136.9$. The low last week was a sharp intra-day fall which a recovery. On the same low, yesterday we saw the support and recovery once again.
A minor pull back of the fall from the peak of 1226.65$ to 1135$ could be witnessed.

Further  selling pressure could be seen on fall and close below 1135$.

Resistance will be at 1170$-1181$-1192$.

NYMEX  LIGHT  CRUDE  OIL :: 

We had indicated to buy on dip to 73-72.5$ range yesterday. Traders who had undertaken long positions can keep a stop loss of 72$ as mentioned.

Resistance will be at 74.85$-76.1$.

Traders can take profit on the long positions at 74.85$-76.1$ range as the opportunity arises.

ENJOY  TRADING  !!!!

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VIEWS FOR THE WEEK STARTING FROM 07TH DECEMBER 2009

INTERNATIONAL SPOT GOLD:-A breakdown and close below 1193$ has been witnessed.

Overall, traders can  use rise to 1173$-1199$ to exit long positions.

Support is 1136$. A fall and close below 1136$ can see a sustained fall in price subsequently.

A lower top and lower bottom sequence could begin on fall and close above 1136$.

 

INTERNATIONAL SPOT SILVER:-Overall, traders can use rise from current level of 18.43$ to 19.46$ to exit long positions.

Support will be at 18.10$.

A negative divergence on RSI is in placed and we could see a near term slide in price therefore look for rise to exit long.

By chance if traders are short or intend to go short can keep a stop loss of 19.50$ and use rise to sell and exit.

 

NYMEX CRUDE:-Range defined for immediate near term is 79.1$-72$.

Buy on rise above 79.1$ or buy on dip towards 73-72.5$ with a  stop loss 72$.

Traders long can look for rise from current price go 75.5-79.1$ to exit long and re-enter above 79.1$.

Overall price movement is sideways

 

 

NYMEX NATURAL GAS:-A wider sideways movement is being witnessed in the band of 5.32$ to 4$.

Lower  range of 4.15$ can be used for buying with a stop loss of 3.99$.

Buy on rise above 4.68$ with low of the day stop loss or 4.43$.

Look for rise to 4.81$-5.32$ to exit long and take profit.

Re-enter long on rise and close above 5.32$ whenever is happens

 

LME TIN:-A flat and action less movement is being witnessed.

Traders can maintain a stop loss at 14950$ to hold long positions

A breakout and close above 15425$ can bring about some upside momentum

 

MCX GOLD TRADING STRATERGY:;-

The stop loss of 17953 has been violated.

Now, it looks that we have formed near term top at least.

Overall use rise to 17808-18035-18377 to exit long positions.

Support will be at 17466-17205.

 A trend line is drawn on the chart. The violation of the same is likely

 

MCX SILVER TRADING STRATERGY:-

We had indicated to sell on fall below 28977 with high of the day stop loss at the point of breakdown.

The low registered yesterday was 28550; traders who managed to implement the sell had the opportunity to benefit.

Sell on rise to 28830-29111 with a stop loss of 29248.

Exit long on rise to 28830-29111-29486 as the opportunity arises

  MCX Gold Feb: Corrective rallies towards 17930/18000 to find resistance for a fall  lower towards 17250/17200 break above 18150 will negate this bearish view.    S1: 17500 S2: 17250 R1: 17750 R2: 17950.

 

MCX Silver March: Rallies to 29060/29200 to cap for decline towards 28400 followed by  28250,break above 29500 will negate this bearish view.  S1: 28550 S2: 28400 R1: 29000 R2: 29250.

 

 MCX Copper Feb: Rallies to 333.50/334.50 to find resistance for a fall lower towards  324/325 break above 337.50 will negate this bearish view. S1:326.40 S2: 322.40 R1: 334.40 R2: 338.40.

 

MCX Crude Oil December: Supports between 3500/3475 could hold for next rise past 3590. Once above 3615 the outlook would start brightening up for a stronger rally towards  levels above 3690. Fall below 3445/3440 is needed to change this expectation as such  a dip could turn the picture bearish for further decline towards 3400 or 3375.   S1: 3503 S2: 3463 R1: 3583 R2: 3623.

 

 MCX Zinc Dec: Rallies to 110.5/111 to find resistance for a fall lower towards 106.5/106, break above 112 will negate this bearish view. S1: 108.20 S2: 106.50 R1: 111 R2: 112.70.

 

MCX Lead Dec: Rallies to 111.50/112 to find resistance for a fall lower towards  107.50/108,break above 114 will negate this bearish view.S1:108 S2:106 R1:112.00 R2:113.70

 

 MCX Nickel Dec: Rallies to 765/770 to find resistance for a fall lower towards 730/725, break above 778 will negate this bearish view. S1: 738 S2: 728 R1: 762 R2: 778

 

  MCX Natural Gas Dec: Dips to 211/213 to find support for a move higher towards 222/225, break below 205 will negate this bullish view.   S1: 211 S2: 205 R1: 220 R2: 225

COMEX GOLD SILVER CRUDE WITH WEEKLY AND LONG TERM OUTLOOK FROM NITESH JAIN AS ON 6TH DEC 2009

Comex Gold :-


Gold soared to new record high of 1227.5 last week but failed to sustain above 1200 level and dropped sharply to close at 1162.3. While a short term top is no doubt in place at 1227.5, it's still a bit early to call for reversal yet. We'll stay neutral for the moment and expects some sideway trading between 1130.1 and 1227.5 first. There could still be at least one more rise in gold towards medium term projection target at 1258 before turning into medium term consolidation. However, sustained break of 1130.1 will suggest that rise from 931.3 has completed and deeper correction could then be seen towards 55 days EMA (now at 1092.9).
In the bigger picture, rise from 681 is expected to develop into a set of five wave sequence with first wave completed at 1007.7, second wave triangle consolidation completed at 931.3. Rise from 931.3 is treated as the third wave and there is no confirmation of completion yet. Such rally is still expected to continue towards 100% projection of 681 to 1007.7 from 931.3 at 1258 next. However, decisive break of 1130.1 support will argue that rise from 931.3 has completed ahead of 1258 target and some deeper pull back could be seen to 1026.9/1072 support zone, or even further to retest 1000 psychological level, before resuming the long term up trend.
In the long term picture, rise form 681 is treated as resumption of the long term up trend from 1999 low of 253 after interim consolidation from 1033.9 has completed in form of an expanding triangle. Next long term target is 100% projection of 253 to 1033.9 from 681 at 1460 level. We'll hold on to the bullish view as long as 931.3 structural support holds

Comex Silver ;-


After surging to as high as 19.50 initially last week but weakened sharply since then. A shot term top is at least formed at 19.50 and the question is how important this top is considering that mentioned target of 19.55/21.44 resistance zone was just missed. In any case, initial bias is on the downside this week as long as 19.00 minor resistance zones. Deeper decline should be seen towards 17.70 support first. Break there will indicate that whole rise from 16.12 has finished too and will pave the way to retest this support. On the upside, above 19.00 will flip intraday bias back to the upside and suggest that recent rise in silver is possibly still in progress for 19.55/21.44 resistance zone before conclusion.
In the bigger picture, there is no confirmation of medium term topping in Silver yet but the risk of reversal is growing significantly. Firstly, as note before, whole medium term rise from 8.4 is is treated as part of the long term, wide range, consolidation pattern that started at 21.44 back in Mar 08. Hence, upside is expected to be limited inside this 19.55/21.44 resistance zone and bring another medium term fall. This 19.55/21.44 resistance zone is just missed. Secondly, strong resistance was seen in the upper trend line and silver has failed to sustain above it last week. Thirdly, upside momentum is clearly diminishing with bearish divergence conditions in daily MACD and RSI. Fourthly, rise from 12.435 has apparently completed a five wave sequence at 19.50.
Therefore, while another rise cannot be ruled out, we'll be cautious on reversal signal even in case of another rise and believe that upside potential is limited, at least in near term. On the downside, sustained break of 55 days EMA (now at 17.46) will be an early signal that rise from 12.435 has completed and break of 16.12 support will confirm. This will also be an important signal that whole rise from 8.4 has completed and we'll then turn focus to 12.435 support for confirmation.
In the longer term picture, the up trend from 01 low of 4.01 topped out at 21.44 and subsequent price actions are treated as correction/consolidation to this up trend. Fall from 21.44 completed after drawing support form 8.5 key level. However, subsequent rally from 8.4 is not displaying a clear impulsive structure and hence, we'd prefer the case that it's just the second wave of the wide range consolidation pattern. Another medium term fall should still be seen for retesting 8.5 before completing the consolidation. Nevertheless, strong support is still expected at 5.45/8.5 support zone to conclude the consolidation.



Nymex Crude Oil :-


Crude oil's rebound from 72.39 was limited at 79.04 and well below mentioned 80.51 resistance. Crude oil then weakened again with a break of 75.18 minor support on Friday. The development firstly indicates that recovery from 72.39 has completed and thus flip the bias back to the downside for a retest on 72.39 initially this week. Secondly, there is no indication that choppy fall from 82.0 has finished and thus more downside will remain in favor in near term. Break of 72.39 will target trend line support at 71.16 next.
In the bigger picture, question remains on whether crude oil's medium term rebound from 33.2 has completed at 82.0 already and the outlook is quite mixed so far. Nevertheless, now, as long as 79.04 resistance holds, fall from 82.0 will remain in favor to continue and we'd slightly prefer the bearish case that crude oil has topped out at 82.0 already. Sustained trading below the trend line support (now at 71.16) will add more credence to this case and target 58.32 cluster support (50% retracement of 33.2 to 82 at 57.60) for confirmation.
On the upside, though, above 79.04 resistance will suggest that recent choppy price actions from 82.0 are merely consolidations in the medium term rise from 33.2. In such case, the rise from 33.2 might be ready to resume for another high above 82.0. However, as we expect such rise to conclude inside resistance zone of 76.77/90.24 (38.2% and 50% retracement of 147.27 to 33.2), focus will remain on loss of momentum and reversal signal in this case.
In the long term picture, there is no change in the view that fall from 147.27 is part of the correction to the five wave sequence from 98 low of 10.65. While the rebound from 33.2 is strong and might continue, there is no solid evidence that suggest fall 147.27 is completed and we're still preferring the case that rebound from 33.2 is merely a corrective rise only. Having said that strong resistance should be seen between 76.77/90.24 fibo resistance zone and bring reversal for another low below 33.2 before completing the whole correction from 147.27

Nymex Natural Gas ;-


After failing to break through 5.318 resistance, natural gas fell to as low as 4.432 before recovering mildly towards the end of the week. After all, it's still staying in range of 4.157/5.138 and thus, there is no change in the overall outlook. That is, recent price actions are merely consolidations to the rebound from 2.409. Hence, while another fall cannot be ruled out, downside is expected to be contained by 4.157 support. On the upside, above 4.90 minor resistance will flip bias to the upside for a retest of 5.318 resistance first and break will target 61.8% projection of 2.409 to 5.318 from 4.157 at 5.955 next.
In the bigger picture, medium term fall from 13.69 is treated as part of the long term consolidation pattern that started at 15.78 back in 2005 and might have completed at 2.409 already. Rise from 2.409 should not be completed yet and we would continue to anticipate an upside break out of the recent range of 4.157/5.138 eventually. Above 5.318 will target 38.2% retracement of 13.694 to 2.409 at 6.72 and beyond. Nevertheless, break of 4.157 support will dampen this bullish case and turn outlook mixed again

VIEWS FOR 4TH DECEMBER 2009

MCX Gold Feb: Any rallies to 18114/18130 or even higher towards 18175 to cap rallies
 for a fall towards 17577/17607. S1: 18098 S2: 18018 R1: 18260 R2: 18340.

---

MCX Silver March: Rallies to 29020/29065 to cap for decline towards 27947/27717.
Unexpected rise above 29325 to force us to abandon our bearish view.
S1: 29120 S2: 28989 R1: 29380 R2: 29508.

---

MCX Copper Feb: Resistance to 327.20/328.20 to cap for a fall towards 321.40 or
even lower towards 314.85. S1: 326.40 S2: 322.40 R1: 334.40 R2: 338.40.

---

 

MCX Crude Oil December: Supports to 3452 to hold for a pullback higher towards
 3542/3554 only a rise above 3571 to change the picture to bullish.
S1: 3503 S2: 3463 R1: 3583 R2: 3623.

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MCX Zinc Dec: While below 111.9, expect dips to 107.60/107.0 levels.
S1: 109.20 S2: 108.20 R1: 111.50 R2: 112.70.

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MCX Lead Dec: While Below 113.0 levels expect prices to dip towards 108.60/108.0 levels.
S1: 110.0 S2: 109.00 R1: 112.00 R2: 113.70.

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MCX Nickel Dec: While below 767 expect prices to dip towards 722 levels.
S1: 738 S2: 728 R1: 759 R2: 772

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MCX Natural Gas Dec: Rallies to 210/212 to find resistance for a move lower towards
200 levels.A direct rise above 214 to raise doubts. S1: 203 S2: 200 R1: 209 R2: 213.

 

MCX GOLD TRADING STRATERGY:-

Traders holding long can keep a stop loss of 17953.

Use rise from current price of 18197 to 18364 for profit booking.

Fresh trading long positions can be undertaken on rise and close above 18365.

 

MCX SILVER TRADING STRATERGY:-

Exit long positions at current price of 29271-29779 range as the opportunity arises.

Fresh trading long positions can be undertaken only on breakout and close above 29780 with low of the day stop loss.

Sell on fall below 28977 with high of the day stop loss at the point of breakdown

 

 

Watch out for:

Change in US Non Farm Payrolls

US Unemployment Rate

US Factory Orders

 

GOLD (spot): 1201.9

 

The fall from 1227 level, extended throughout the sessions yesterday as uncertainty shrouding  ECB rate announcement and today’s NFP/Unemployment data releases prompted long liquidation.

 

Favoured view expects 1200-1192 region to attract bargain hunting for a move higher towards 1218. Bullish view towards 1245-55 is still maintained, but we would look for a push above 1227/30 region before entering such directional trade.

 

Alternate Scenario

It would require a heavy fall below 1180 to entirely alter such bullish view. Favoured expects 1180 to hold for the near term.

 

Nymex Crude(Jan): Last 75.9

 

Choppiness to continue. Look for a few hours close above 76.5 before entering directional trade on the upside.

US Non Farm  payrolls/Unemployment data late in the week sets up conditions for intense volatility.

 

 

Comex Copper (Mar): Last 3.2225

 

3.20 region expected to hold for a strong push higher towards 3.25 – 3.30. US Non Farm  payrolls/Unemployment data late in the week sets up conditions for intense volatility

 

VIEWS FOR 3RD DECEMBER 2009 - MCX & COMEX

MCX GOLD TRADING STRATEGY:-

Traders holding long can keep a stop loss of 17953.

Corrective dip to 18138-18037 can be used for buying with a stop loss of 17953.

Expect higher range of 18289-18390 to be tested

 

MCX SILVER TRADING STRATERGY:-

Hold long positions with a stop loss of 29300.

Expect higher range of 29805-30026 to be tested

 

NYMEX LIGHT SWEET CRUDE:-

Corrective dip to 75$ or below can be used for buying with a stop loss of 72.

Alternatively, buy on rise and close above 79.10$

 

SPOT SILVER:-

Resistance will be at 19.45$-19.70$.

Negative divergence on 14 day RSI has been witnessed if we compare the current value to its peak, in relation to the price movement.

Hold long positions if any with a stop loss of 19$

 

NYMEX NATURAL GAS:-

Overall stuck in sideways movement and at one point it looked that a breakout was possible but that was not to be seen.

Corrective dip to 4.15$ can be used for buying with a stop loss of 3.98$.

Alternatively, wait for a breakout and close above 5.32$.

Overall once again look for rise from current price to 5.32$ to exit long

 

SPOT GOLD:-

International Spot Gold price is expected to move towards 1234$ a the 1 time and 1.618 Fibonacci level.

Traders can hold long positions with a stop loss of 1193$

 

USD INR:-

Support will be at 45.7-45.5.

Resistance is at 46.44-47.10.

It is likely that some weakness in rupee is likely to be witnessed on cross over above the resistance. A pullback for USD could be seen against INR.

Expect weakness in USD on fall below 45.50

 

 

Watch out for:

ECB Rate announcement

Eurozone GDP, Retail Sales, German PMI

US Initial Jobless,

GOLD (spot): Last 1226

Morning moves have taken prices closer to our target of 1227 suggested yesterday.

We are still hopeful of another swing towards 1245-55 region, but would choose to be cautious from this point on wards. 1223 would be crucial for sustenance of the uptrend, and for an outright strengthening. A bend lower below 1223 could temporarily cause doubts, but 1215/10 band is likely to attract buying again. 

Nymex Crude(Jan):

Yesterday’s swing lower evolved precisely on anticipated lines, with 78.59 capping upside, and with 76.2 attracting bargain hunting. Favoured view expects a swing higher towards 78 today.A firm push below 76.2 would however force us abandon the positive view.

Comex Copper (Mar: Last

After a test of 2.43 levels anticipated yesterday, a downsing is now in progress, targetting 2.39, but a another violent rally towards 2.60 is very much in the cards as long 2.33 holds downside threats

MCX Gold Feb: Once again a corrective move evades the market. Supports at 18249/18264  to hold for 18489/18519. A correction from there looks evident.Fall below 18069 to begin  the corrective move. S1: 18107 S2: 18027 R1: 18267 R2: 18347.

MCX Silver March: Supports at 29386/29416 to hold for 29890-29921 or even higher towards  29951/29997.Fall below 29003 to begin a corrective move.  S1: 29455 S2: 29325 R1: 29715 R2: 29845.

MCX Copper Feb: Supports at 327.90/328.90 to hold for 332/334 now.Only a fall below  323.80/325 to begin a corrective move lower.S1: 328.60 S2: 324.60 R1: 336.60 R2: 340.60.

MCX Crude Oil December: Supports are at 3517 followed by 3498 to hold for a rally higher  towards 3642 and 3679.Fall below 3461 to dent our expectations.   S1: 3523 S2: 3483 R1: 3603 R2: 3643.

MCX Zinc Dec: Dips to 109.30/109.00 to find support for a move higher towards  113.50/114.0 levels.Fall below 107.0 to negate this view. S1:110.70 S2:108.80 R1:112.70 R2: 114.10.

MCX Lead Dec: Dips to 112.0/111.60 to find support for a move higher towards 116.0  levels.Fall below 110.0 to negate this bullish view. S1:112.35 S2:111.20 R1:114.70 R2:115.70.

 MCX Nickel Dec: While above 737 expect prices to rally higher towards 791 levels.  S1: 748 S2: 738 R1: 769 R2: 782

 

 MCX Natural Gas Dec: Rallies to 218/221 to find resistance for a move lower towards 204 levels. A direct rise above 227 to raise doubts. S1: 206 S2: 202 R1: 214 R2: 218 

ENJOY  TRADING !!!! 

LOOK FORWARD TO JOIN OUR PAID SERVICES FOR REAL TIME MCX & NCDEX CALLS

EXPECTATION FOR 2ND DECEMBER

Watch out for:

Intl GOLDspot above 1200. 1227 in sight?

Rubber continues to surge in TOCOM.

Eurozone PPI

US ADP & Challenger Jobs data

Fed speeches and Beige Book


--------------------------------------------------------------------------------



GOLD (spot): Targets1227- 50



The week has a lot of crucial economic data which presents set up for intense volatility, and the current momentum favours the uptrend to continue to atleast 1245-55 region, with chances of intermediate pause seen at 1220-27 region



Strategies

Buy with rallies.

Dips to 1198/1192 could also be bought.

Target 1227-1245


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Nymex Crude (Jan): Last 78.3

After yesterday’s swing higher towards 79.05, prices are still in the neutral region, as we are yet to see a close above 78.5, suggested yesterday. So, even though the bias is increasingly turning positive, we are less inclined to take a directive bullish view, until atleast we see a couple of hours of close above 78.5 today, in which case we could see 81.5. Meanwhile, dips to 76.2 would continue attracting bargain hunting


--------------------------------------------------------------------------------



Comex Copper (Mar): Last 3.2265



Dips to 3.18 could find support for a rise towards 3.26



INTERNATIONAL SPOT SILVER:-The trend line resistance has been crossed on closing basis in sustained manner.

Hold long positions if any with a stop loss of 18.36$.

Corrective dip to 18.88$ or below can be used for buying.



INTERNATIONAL SPOT GOLD:-Hold long positions with a stop loss of 1194.

Corrective dip to 1201 can be used for buying.

Expect higher range of 1230$ to be tested



NYMEX NATURAL GAS;-A range bound movement has been develop now.

Till a further breakout and close above 5.32$ is not witnessed further rally cannot be seen.

Support is at 4.61$



NYMEX CRUDE;-Hold long positions if any with a stop loss of 77$.

Expect higher range of 79.8-82$ can be used for profit booking



MCX GOLD TRADING STARATERGY;-Traders holding long can keep a stop loss of 17700.

Sell on fall below 17700 with high of the day stop loss.

Exit long positions on rise to 18120-18194 range as the opportunity arises.

Fresh trading long positions can be undertaken on rise and close above 18082 with low of the day stop loss.

Corrective dip to 17891-17773 can be used for buying with a stop loss of 17700





MCX Gold Feb: Ideally, supports at 18031 to hold for 18180/18225 or even higher towards
18255.Unexpected fall below 17881 to result in a corrective fall.
S1: 17878 S2: 17798 R1: 18038 R2: 18118.


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MCX Silver March: Supports at 29028 to hold for a test of 29535/29564 or even higher
towards 29917/29945.Fall below 28906 to kick-start a sharp corrective decline.
S1: 29205 S2: 29075 R1: 29464 R2: 29595.


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MCX Copper Feb: Dips to 319/321 to hold for 329.50/331.20 levels.Fall below 317.90 to
lead into a corrective decline. S1: 324.75 S2: 320.75 R1: 332.75 R2: 336.75.


--------------------------------------------------------------------------------




MCX Crude Oil December: Important support is at 3584 followed by 3561. Ideally supports
to hold for a break above 3658 targeting 3758.Fall below 3554 to dent our bullish
expectation. S1: 3608 S2: 3568 R1: 3688 R2: 3728.


--------------------------------------------------------------------------------




MCX Zinc Dec: Dips to 107.30/107.00 to find support for a move higher towards
111.50/112.0 levels.Fall below 105.0 to negate this view.
S1: 107.70 S2: 106.80 R1: 109.70 R2: 111.10.


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MCX Lead Dec: Dips to 111.0/110.60 to find support for a move higher towards 115.0
levels.Fall below 108.0 to negate this bullish view.
S1: 110.35 S2: 109.20 R1: 113.70 R2: 114.70.


--------------------------------------------------------------------------------




MCX Nickel Dec: While above 737 expect prices to rally higher towards 791 levels.
S1: 748 S2: 738 R1: 769 R2: 782


--------------------------------------------------------------------------------




MCX Natural Gas Dec: Rallies to 233/235 to find resistance for a move lower towards
215/210 levels.A direct rise above 241 to raise doubts. S1: 222 S2: 218 R1: 230 R2: 234





MCX SILVER TARDING STARTERGY;-Corrective dip to 29093-28681 can be used for buying with a stop loss of 2440.

Expect higher range of 29746-30158 to be tested

VIEWS FOR THE WEEK STARTING FROM 30TH NOVEMBER 2009

MCX Gold Feb: Daily chart shows pullbacks can keep the price on course towards levels
above 18061.Big picture shows that a corrective dip to 17534 or 17308 also is possible.
Resistance points are near 17910 / 18136.If Fridays freak declines are at 17094 then the
rise from there could be to 17910/18136.This is the favored expectation.
S1: 17590 S2: 17510 R1: 17750 R2: 17830.

MCX Silver March: Supports near 28218 or maximum 27986/27893 could hold corrective dips
for next rise towards 28993.Once above 28993 the scope for further gains towards 29459
would improve.Weekly chart looks bullish for a rise towards 30465.It needs to fall below
27600 to cause doubts about this bullish view. S1: 28243 S2: 28113 R1: 28505 R2: 28633.

MCX Copper Feb: The weekly chart is bullish for a rise to 337. Supports in shorter-time
frame appear near 318.20/316.20.It needs to fall below 313.20 to cause doubts about this
bullish view. S1: 316.75 S2: 312.75 R1: 324.75 R2: 328.75

MCX Crude Oil December: The weekly charts indicators have turned negative after
the sharp decline in Friday.The chart appears bearish and would most probably get
resisted near 3575 or 3614/3624 for further decline to 3467 or even 3428.The daily line
chart may breakout to the upside towards 3787 or 3885. The second alternative looks more
probable.Direct rise above 3646 would lessen the existing downside.
S1: 3502 S2: 3462 R1: 3582 R2: 3622.


MCX Zinc Dec: Dips to 103.0/103.65 to find support for a move higher towards
106.50 / 107.0 levels.Fall below 102.0 to negate this view.
S1: 102.70 S2: 101.80 R1: 104.70 R2: 105.10.

MCX Lead Dec: While above 105.30 expect prices to rally higher towards 109.30 levels.
S1: 106.20 S2: 105.20 R1: 108.20 R2: 109.50


MCX Nickel Dec: While above 737 expect prices to rally higher towards 791 levels.
S1: 748 S2: 738 R1: 769 R2: 782

MCX Natural Gas Dec: While above 233 expect price to rally higher towards 252 or even Higher towards 261 levels. S1: 240 S2: 236 R1: 247 R2: 251


TRADING STRATEGY ::

MCX GOLD TRADING STRATERGY:-Exit long positions on rise from current price of 17700-18009 range as the opportunity arises.

Expect sideways correction before making any further attempts to cross the recent high of 18047.

Support will be at 17634-17296-17262.

MCX SILVER TRADING STRATERGY :: On Friday, we had indicated to sell below 28338. The high and low registered on Friday was 28583 and 27538 respective.

Traders who sold below 28583 had the opportunity to benefit.

Cover short positions if any on dip to 28095-27608 range as the opportunity arises.

Traders who are stuck up with long positions can look for rise from current price of 28345-28653 to exit long positions.

Buy on rise above 28860

INTERNATIONAL SPOT GOLD ::

The rally had got steeper and vertical in last few weeks.
A trend line breakdown has been witnessed but the close is above the trend line.

Overall immediate objective from trading purpose can be to exit long positions on rise from current price of 1178$ to 1195$ as the opportunity arises.

A correction or sideways movement could be witnessed in the immediate near term.


INTERNATIONAL SPOT SILVER ::

The upper trend line take from the highs has been tested but has not been able to cross and sustain above it.

Negative divergence on RSI is being witnessed for a long time but price cracking down the support has not been witnessed significantly. Recovery has been witnessed in the price to come back to the recent highs generally.

The immediate objective can be to exit long position on rise from current price of 18.44$ to 18.93$.

Support will be at 18$.

A fall and close below 18$ can take the prices down towards 17.64$-17$


NYMEX CRUDE :: Support level is around 70$ which the 23.6% retracement level of the rise from 35.65$ to 82$.

A further rally can come into existence only on breakout and close above 82$. Till then expect sideways movement in the wider band now of 82$-70$. Overall objective will be to exit long positions on rise from current price of 76$-82$ to exit long.


NYMEX NATURAL GAS :: Only a breakout and close above 5.32$ a break the shackle of sideways movement and consolidation.

Traders can Book profit if holding long positions at current price of 5.19$ to 5.32$ as the opportunity arises.

Re-enter long on rise and close above 5.32$.

Support will be at 4.76$-4.61$


GOLD (spot): 1178.5

A swift flash towards 1136 last Friday, almost invalidated the strong support at 1146, but on second look, it becomes clearer that buying re emerged after prices swiftly pulled back and stayed above 1146. To this extent, the momentary fall below 1146 could be ignored, and suggests that buying interest is alive. Prices have now swung higher, but 1181 looks challenging.



Strategies: (Long)

Longs above 1181

Longs at 1168

Strategies: (Shorts)

Sell at 1180/81

Sell below 1146

Broad Trend: A direct rise above 1180 could call for 1227

INTERNATIONAL GOLD SILVER MOVE AS PER ELLIOT WAVE THEORY

INTERNATIONAL SILVER WEEKLY PERSPECTIVE ( From 2001 till date) Prices are in $/Oz :-


Our preferred wave count is as follows:

WAVE 1I - which in leading diagonal starts from 4 ( Nov 01) - 5.13(JUL 02)

WAVE 2 - 5.13(July 02) – 4.34 (MAR 03)

WAVE 3 - 4.34(MAR 03 – 15.17 (MAY 06)

WAVE 4 - 15.17(MAY 06) – 11.03(AUG 07)

WAVE 5 - (Failure ) 11.03(AUG 07) – 18.67(JUL 08)

Correction of Entire Rise :

Wave A - 18.67(JUL 08) – 9.11(DEC 08)

WAVE B – 9.11(DEC 08) – 18.63 still in progress

Internals of WAVE B : Zigzag

wave a : 9.11( DEC 08 ) – 16.22(JUNE 09)

wave b : 16.22 ( JUNE 09) – 12.44 ( JUL 09)

wave c : 12.44(JUK 09) – 18.63 still progress….

It looks like that we are in corrective wave c of Wave B as shown in the chart. As long as support of 17.00 intact we can see a potential rise towards 20 – 21.50 -23 for wave B completion

If support of 17 breaks decisively then it will a higher possibility that WAVE B will get completed at near-term high.

CONCLUSION: Short to medium term investors can hold long positions with stop loss of 17.00



Gold likely to touch USD1200 - USD1400 very soon;-



We assume that an major pattern is terminated at the SEP 1999 low at USD251 and new impulse has started from there on. (Prices are in USD/Oz)

Our preferred wave count is as follows:

WAVE I - 251(SEP 99) – 338(OCT 99)

WAVE II - 338(OCT 99 – 253 FEB 01)

WAVE III - 253(FEB 01 – 1152 still in progress

Internals of WAVE III

Wave 1 – 253 FEB 01 – 389 FEB 03

Wave 2 – 389 FEB 03 – 340 JULY 03

WAVE 3 340 JULY 03 – 988 JULY 06

WAVE 4 988 JULY 06 – 680 OCT 08

WAVE 5 680 OCT 08 – TILL 1152 still in progress


INTERNALS OF WAVE 5

Wave I - 680 OCT 08 – 1005 FEB 09

Wave ii - 1005 FEB 09 – 864 APR 09

Wave iii - 864 APR 09 – 1152 still in progress.

If the above count structure is true then the target area for wave iii is anywhere between 1200 – 1400.

The broader time frame channel value for wave 5 is at 1400 and projection target is 1400 – 1700

MARKET EDITOR :- NITESH JAIN JOIN US TO ROCK EVERY DAY

 

NEXT WEEK OUT LOOK ON GOLD SILVER CRUDE WITH LONG TERM STRATERGY

Comex Gold (GC):-


Gold's uptrend continued last week and made another record high of 1153.4 then turned sideway. Initial bias remains neutral this week and some more consolidations cannot be ruled out. But still, short term outlook will remain bullish as long as 1125.8 support holds and further rise is in favor. Above 1153.4 will target 161.8% projection of 985.5 to 1072 from 1026.9 at 1166.9 next. Nevertheless, considering bearish divergence conditions in 4 hours MACD and RSI. Break of 1153.4 will indicate that a short term top is at least formed and should bring deeper decline. But even in such case, downside should be contained above 1072 resistance turned support and bring another rise.
In the bigger picture, as noted before, rise from 681 would likely develop into a set of five wave sequence with first wave completed at 1007.7, second wave triangle consolidation completed at 931.3. Rise from 931.3 is treated as the third wave. 61.8% projection of 681 to 1007.7 from 931.3 at 1133.2 is already met and next target will be 100% projection at 1258. On the downside, however, break of 1072 resistance turned support will argue that rise from 931.3 has completed and some medium term lengthier consolidations should be seen before the long term up trend resumes.
In the long term picture, as discussed before, rise form 681 is treated as resumption of the long term up trend from 1999 low of 253 after interim consolidation from 1033.9 has completed in form of an expanding triangle. The strong break of 1033.9 resistance affirms this case and should pave the way to 61.8% projection of 253 to 1033.9 from 681 at 1160 and then 100% projection at 1460 level. We'll hold on to the bullish view as long as 931.3 structural support holds.

Comex Silver (SI):-


Silver's rally extended to as high as 18.85 last week but turned sideway since then. Initial bias remains neutral this week and some more consolidations could be seen below 18.85 first. But after all, downside is expected to be contained well above 17.025 support and bring rally resumption. Above 18.85 will confirm that medium term rise has resumed and should target 19.55/21.55 resistance zone next.
In the bigger picture, whole medium term rebound from 8.4 is still in progress and should now be targeting 19.55/21.55 resistance zone. But after all, rise from 8.4 is treated as part of the long term, wide range, consolidation pattern that started at 21.44 back in Mar 08. Hence, upside is expected to be limited inside this 19.55/21.44 resistance zone and bring another medium term fall. On the downside, break of 16.12 will now be an important signal that silver has topped out in medium term already and will turn outlook bearish.
In the longer term picture, the up trend from 01 low of 4.01 topped out at 21.44 and subsequent price actions are treated as correction/consolidation to this up trend. Fall from 21.44 completed after drawing support form 8.5 key level. However, subsequent rally from 8.4 is not displaying a clear impulsive structure yet and hence, we'd prefer the case that it's just the second wave of the wide range consolidation pattern. Another medium term fall should still be seen for retesting 8.5 before completing the consolidation. Nevertheless, strong support is still expected at 5.45/8.5 support zone to conclude the consolidation.




Nymex Crude Oil (CL):-


Initial bias in crude oil remains on the downside this week for a test on 75.57 support first. Break there will confirm that whole choppy fall from 82.00 has resumed and should target 61.8% retracement of 65.05 to 82 at 71.52 next. On the upside, while some recovery might be seen, short term outlook will remain cautiously bearish as long as 80.51 resistance holds.
In the bigger picture, we'd continue to slightly favor the bearish case as long as 80.51 resistance holds. That is, a medium term top is formed at 82.0 on bearish divergence conditions in daily MACD as whole rise from 33.2 has completed. Break of trend line support (now at 70.14) will add more credence to this case and bring deeper fall to 58.32 cluster support (50% retracement of 33.2 to 82 at 57.60) for confirmation. However, break of 80.51 will indicate that price actions from 82.0 are merely consolidations in the medium term rise only. Further break of 82.0 will bring medium term rise resumption. However, as we expect such rise to conclude inside resistance zone of 76.77/90.24 (38.2% and 50% retracement of 147.27 to 33.2), focus will remain on loss of momentum and reversal signal even in case of another rise.
.In the long term picture, there is no change in the view that fall from 147.27 is part of the correction to the five wave sequence from 98 low of 10.65. While the rebound from 33.2 is strong and might continue, there is no solid evidence that suggest fall 147.27 is completed and we're still preferring the case that rebound from 33.2 is merely a corrective rise only. Having said that strong resistance should be seen between 76.77/90.24 fibo resistance zone and bring reversal for another low below 33.2 before completing the whole correction from 147.27


Nymex Natural Gas (NG):-


Natural gas dropped further to as low as 4.157 last week before recovering. The development argues that whole rebound from 2.409 is finished already. Hence, while some sideway trading might be seen initially this week, short term outlook will remain bearish as long as 4.734 resistance holds. Current decline is still expected to continue to 61.8% retracement of 2.409 to 5.318 at 3.52 first. However, break of 4.734 resistance will dampen this bearish view and turn short term outlook neutral again.
In the bigger picture, medium term fall from 13.69 is treated as part of the long term consolidation pattern that started at 15.78 back in 2005. The break of 55 days EMA, even though it's brief so far, suggests that rebound from 2.409 is possibly just a corrective rise only and may have completed after failing to sustain above 55 weeks EMA. Deeper decline could now be seen for a retest of 2.409 support first. On the upside, break of 5.318 resistance is needed to revive the case that Natural gas has bottomed in medium to longer term.

NOTE GOLD MARKET MOVING IN LINE  WITH OUR EXPECTATION AS ALERT GIVEN ON 25TH AUG WHEN IT WAS TRADING NEAR 930-950$:-


GOLD LONG TERM OUTLOOK ;-GOLD AS FORMED A PENANT FLAG, SUGGESTING AN UPSIDE BREAKOUT IS CLOSE AT HAND. THE DIRECTION OF THIS PRICE GOING IN TO THIS PATTERN SHOULD BE THE SAME DIRECTION AS PRICE LEAVES THIS PATTERN WITH AN UPSIDE TARGET EQUAL TO THE LENGTH OF THE FLAG POLL. THAT GIVES AN UPSIDE PRICE TARGET OF 1325, WHICH IS PRECISELY THE SAME UPSIDE TARGET OF AN INDEPENDENT PATTERN WHICH WE HAVE BEEN SHOWING FOR THE WEEKS THE BULLISH AND SHOULDER BOTTOM. GOLD HAS ALSO NEARLY COMPLETED A VERY HEAD AND SHOULDER BOTTOM THE UPSIDE TARGET IS 1325 AND THE PROBABILITY OF REACHING THAT LEVEL RISES DRAMATICALLY WITH AN UPSIDE BREAKOUT ABOVE 1050. NOW STRONG SUPPORT FOR THIS VIEW AT 905 AND 880 AS LONG GOLD HOLDS THIS SUPPORT MARKET WILL BE IN BULLISH ZONE BUYING IN CORRECTIVE DIPS IS ONLY GOOD MARKET EDITOR NITESH JAIN

BIG PICTURE MOVE ON SILVER FOR THE YEAR 2010

SUMMARY:-


· Prices continue to out perform Gold on both the upside and the downside. In 2010, Silver is expected to range between $13/oz and $25/oz.

· Investment demand is expected to remain strong in 2010, but a rebound in fabrication demand should see buying pressure increase.

· After the slump into recession in 2008, the recovery has been fast, but we doubt it is sustainable and therefore expect further distress to be seen in the months ahead.

· The dollar may be oversold in the short term, but structural problems suggest further dollar weakness is likely and that could lead to a dollar crisis.  With the supply overhang, investors are going to have to continue buying Silver, but given their current interest and the big picture outlook, this is likely to happen.

Introduction :-


Since moving above $10/oz in March 2006, Silver prices have been on a roller-coaster ride with some fast and long rallies interspersed with steep and aggressive sell-offs; none more so than the drop from $21.36/oz to $8.50/oz between March and October 2008. However, the strong rebound after last year’s sell-off does indicate ongoing steady interest. Silver has benefitted from being both an industrial metal and a cheap precious metal, as industrial metals have rallied strongly in anticipation of an economic recovery and as a cheap precious metal, it has won market share from Gold jewellery. Also as a precious metal it has been sought after as a hedge against dollar weakness and financial distress. Given the diverse nature of Silver demand, prices are expected to perform well as even if weakness is seen in one area of demand, the other
areas should hold up and indeed could see demand accelerate. Silver also does not have the threat of IMF sales overhanging it. Generally for these reasons we feel there is still good upside potential for Silver and with prices (basis $17.50/oz) still 18% below last years’ highs and arguably still 185% below the 1980 highs, the outlook remains bullish. However, given Silver’s supply/demand situation the outlook for Silver can only be bullish while investors remain as committed to buying Silver as they have been in recent years. Over the past five years fabricated demand has on average been around 2,000 tonnes lower then supply. While investors are prepared to buy this surplus then higher prices can be seen, but should investors’ interest wane then Silver prices could tumble. Overall, we remain bullish for Silver as it is likely to follow in Gold’s footsteps and at times outperform it. In last year’s Forecast report we were looking for the bulk of trading in 2009 to be between $11/oz and $18/oz; the low in January 2009 was $10.33/oz and the high has so far been $17.93/oz. In 2010, we feel Silver will trade within a $13/oz to $25/oz range as we expect more turbulence in the financial markets
Industrial Demand :-


Industrial demand accounts for 43% of total Silver end-use demand and is of paramount importance to the Silver market. In recent years global growth has been expanding at a fast pace, but this slowed to 1.4% in 2008 and is off significantly so far in 2009. Indeed industrial demand is expected to drop some 12% this year, but is expected to recover next year as a more broad based recovery is likely. The IMF forecast for World economic growth is 3% in 2010, after a 1% drop in global GDP in 2009. With industrial applications accounting for 54% of fabrication demand, which is up from 38% ten years ago and with India, China and the US, accounting for 70% of this rise in industrial usage and with Silver now being used in a wide
spread of new applications, demand is expected to recover faster than GDP growth. As such, we expect Silver’s industrial demand to grow around 7% in 2010. In addition to growth picking up more than global GDP, after the destocking seen over the past year, we expect restocking to see apparent demand rise even faster than actual demand. Therefore the combination of restocking, a pick- up in actual demand and ongoing investment buying, could certainly see Silver prices continue to rise strongly


Investment demand :-


With Silver supply outpacing fabrication demand in recent years, investors’ off-take has been critical in driving the overall bull market and the emergence of Exchange Traded Funds (ETFs) have been central in
facilitating this growth in investment demand. When the first ETF was launched in April 2006, it started with 653 tonnes of Silver, the peak holding to date was 11,112 tonnes, seen in August this year. As the chart opposite shows growth has been strong and steady; there have been periods of light redemptions along the way, but the trend is firmly up. At the end of September 2009, the combined holdings stood at 10,958 tonnes, which is 1.4% below the peak, but still 32% up since the start of the year. In 2008, the combined holdings grew 2,326 tonnes; in the nine months to the end of September 2009, the ETFs have grown by 2,702 tonnes. The fact that redemptions up until now have been light, suggests that long term investors are still buying into Silver’s safe-haven purposes.The presence of this above ground Silver stockpile is a potential threat to prices if mass liquidation were to unfold, especially as the total combined holdings is equivalent to roughly half a year’s mine supply. However, in the current environment of financial uncertainty and dollar weakness we would be surprised if investors were ready to sell the protection Silver offers them. This is especially so as prices are still well below the peak seen in 2008 at $21.36/oz. However, there is no denying the fact that the Silver in the ETF’s is potentially very liquid and therefore trends in the ETFs’ holdings need to be monitored carefully


More room for speculators :-


The net Fund Silver position pulled back heavily during last year’s second half selloff, but the position is climbing again and remains well below the peaks seen in 2006, 2007 and 2008. With the net long position
last at 47,410 contracts, it is still 12.4% below the peak in 2008 and 29.2% below the high in 2006. So with Silver prices also 23% below their 2008 peak, there seems good potential for prices to rise if the situation
remains bullish. Indeed, in this respect, Silver looks better placed than Gold to extend gains as the net long Fund position in Gold is already at record levels. As such, it does look as though Silver will continue to outperform Gold on the upside.


Technical outlook;-


Following the rapid sell-off in the second half of 2008, Silver prices have been trending higher again in an upward channel. Prices recently tackled the band of overhead supply seen between March and July last year between $16.20-$19.00/oz, but resistance was encountered around $17.65/oz and prices have now pulled back to consolidate. With the stochastic indicators also crossing lower Silver prices may now pull back towards the bottom of the channel which is around the $14/oz level, which is also where the 30 week (150 day) moving average is. However if the up channel continues to push prices higher then prices are likely to gradually overcome the overhead band of supply - the top of which is at $19.47/oz, which would then open up the way for a rechallenge of the highs at $21.36/oz.


Conclusion and Forecast :-


The situation in Silver is very interesting, even before the recession the market was running a supply surplus and this was made worse by the drop in demand, even though supply was cut too. However, the distress in the markets and concern over how this financial mess and the global imbalances are going to be corrected has increased demand for safe-haven assets, such as the precious metals. In the medium term, while the supply surplus is present, Silver will be vulnerable if investors’ commitment to Silver wanes. If investment interest fails to soak up the annual surplus prices are likely to fall, indeed falling prices would then no doubt trigger liquidation of existing positions that would add to the downside pressure on prices. However,
we do not think such a scenario will unfold between now and the end of 2010, although there is no harm in having a contingency plan for when such a time arrives. Investor interest as seen by the steady climb in the ETFs’ holdings shows ongoing strong demand and with ETFs increasing their size by some 2,700 tonnes in the first nine months of 2009, it does look as though this will more than absorb the market’s surplus. With ongoing concern about the dollar and US creditors vocally warning about dollar devaluation, not to mention the risk of a double-dipped recession, there seems plenty of reasons for investors and investment institutions to look to safe-guard their wealth and to diversify their dollar exposure, all of which should underpin demand for precious metals.In the near term, prices are expected to consolidate, but there is also a risk of a deeper correction in equities and industrial metals, that could drag Silver prices lower initially. However, we think dips in Silver prices will be seen as a buying opportunity, by investors and fabricators alike. In addition, we expect fabrication demand to recover later in 2010 and with that is likely to come industrial restocking. So Silver could, for a time, see strong demand from all areas of demand. In addition, we feel Silver is likely to follow in Gold’s footsteps and as such we expect prices to spend the bulk of 2010 within a $13-$25/oz trading range. Should central bankers and politicians manage to find workable solutions to the bigger issues troubling the financial markets then demand for safe-haven products could suffer and then some fast
corrections would likely follow, but we think there is little chance of this happening any time soon and therefore we remain bullish for Silver.