MCX Gold finally broke below its prolonged consolidation with broad range of 38200-37300. Post which prices witness the steep fall and loss around 700 points in a single session. We were able to capture this downmove with help of wave theory, MACD and simple channeling technique which helped us in identifying key support and resistance levels.
MACD (Moving Average Convergence and Divergence) is a momentum indicator that can help either in trend following or reversals as well. Just with the help of simple crossover technique you can catch amazing move across asset classes.
Whenever MACD line crosses above the signal line this indicates a bullish crossover, on the other hand when MACD line crosses below the Signal line this indicates a bearish crossover. However, one cannot rely only on MACD and price confirmation is also very important along with Elliott wave pattern.
Look at the below chart of Gold from “The Commodity waves short term update” a daily research report
MCX Gold December 60 min chart: (Anticipated as on 30th September)
MCX Gold December 60 min chart: (Happened as on 01st October)
(Following is the gist taken from research published on 30th September, 2019 in “The Commodity Waves Short Term Update”)
On the hourly chart of MCX Gold, in the previous session broke the important support level of 37500. Post breaking below the support prices dragged lower and lower and also managed to close below it. Also as per wave theory the price action suggests that we are currently moving lower in the form of wave (iv). Wherein currently prices are moving lower in the form of wave c.
We have shown MACD indicator which provide confirmation of the down move as the MACD line crosses below the 9 day EMA wherein the MACD line is lesser than the 9 day EMA. Also if we observe the MACD indicator, the crossovers have been marked with circles and after the crossovers we can see the distance increasing between both the MACD line and signal line, confirming the emerging trend
In short the trend for MCX Gold seems to be negative, with the immediate resistance placed at 37100. If the prices break below the previous session low of 36920 we can expect the prices to test ….. level provided the resistance level of 37100 is held in tact on a closing basis.
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