It is often difficult to identify the direction of prices when they are consolidating or moving in non trending direction. To get confirmation in which direction the commodity might get headed we use different momentum indicators which gives clear picture and possibilty of riding the future trend.
Below shows the chart and research applied on MCX copper using ichimoku cloud MACD, simple trendline break also with elliott wave counts which helped us to gauge the negative move.
MCX Copper, currently wave (Z) on daily time frame is unfolding which in itself is unfolding as a complex corrective pattern.
As shown on the hourly chart, wave (d) got completed near 373 levels and now we are seeing wave (e) (red) unfolds. Price seems to be moving on downside in the form of minor wave f within wave (e) and can move towards the next support level of 395.
Ichimoku Cloud: We can see prices have broken below the cloud indicating negative bias also future cloud is red. Also the base and conversion lines are placed above the prices confirming the bearish momentum.
MACD: The MACD indicator is a momentum indicator based on the difference of the 12 and 26 EMA. The MACD line crossing below the signal line indicates falling momentum. We can see on the hourly chart MACD is has cross the signal line on the downside and both are already below the zero line which indicates negative momentum.
Trendlines: As you can see red horizontal trendline which was acting as resistance to prices from where it reverse and broke below the upward slopping red trendline decisively on downside which was also confirmed on MACD giving the negative confirmation.
The above research proves that combining wave theory with different indicators such as Ichimoku cloud, Trendlines, MACD etc. It helped in identifying the trend in MCX Copper which is negative.
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