In the end of June 2014 amid Iraq issue we witnessed MCX Crude topped out near 6500 levels and made a low of 5970 recently.
This is one of best example where the phrase fits superbly that “Buy on rumors and sell on news.” This is the part of the game but price charts reflects everything. In the entire trend from 6500 to 5970 not a single bar gave close above prior bars highs and trend continued on downside. This bar technique is very simple but important from trading perspective. We are also applying Elliott wave theory to forecast the prices which suggested that Crude prices are very matured stage of down move when prices were trading at 6000 and accordingly we published the research in our “The Commodity Waves Short Term Update” for our paid clients.
Below write up we have taken from The Commodity Waves Short Term Update dated 17th July 2014suggesting our positive bias.
“For WTI Crude, in the last trading session prices showed some relief sign, moved higher and closed on positive note. For the first time prices have given close above prior bars high and made bullish bar. This suggests that trend is probably in reversal mode. Now, one should be very careful and today’s follow up action will provide further confirmation that whether trend is changing or not. Now, on downside price action near 100 level is very important and protection of this level on closing basis is important to catch a reversal from here on. On upside break above 102 level will provide positive confirmation.
As shown in 60 mins chart of MCX Crude, in the last trading session prices opened with gap up, throughout the day prices sustained above the gap and closed on positive note. Currently prices are intact in downward moving channel and prices have given close exactly near the channel resistance. But looking at the structure of the WTI Crude, there is a higher probability that downside correction has completed in form of triple correction pattern (a-b-c-x-a-b-c-x-a-b-c). However, positive price confirmation is important which we will get when prices breaks above 6120 level where channel is placed and on downside price action near 6000 becomes very important to decide the trend.
Crude 60 mins Continuous chart:
Happened Crude 60 mins Continuous chart:
Trading Strategy on 17th July 2014: In short, prices are trading at crucial level where break above 6120 level will take prices towards 6160/6180.”
Happened on same day: As expected after breaking above 6120 levels, prices did not look back and achieved our mentioned levels.
Trading Strategy on 18th July 2014: “trend is positive with the support of 6130. On upside price can move towards 6250 levels.”
Happened: prices touched the high of 6264 and currently retracing on downside, so what should be the trading strategy from here on ?
So, over short term where prices are headed? To know the answer, Subscribe to “The Commodity Waves Short Term Update” which includes MCX Gold, MCX Silver, Copper and Crude with important levels. For more information visit Pricing page.