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May 11, 2009
CRB Index Weekly close: 405.5 The CRB index started the week with a gap-up, rose considerably higher crossing 400 and closed the week at 405.50. This was the follow-up of the bullish engulfing candlestick pattern seen in the earlier week. The index has closed at the highest point of the week, which points to further gains. We are extending the target marginally to 415, which is the equality target of the previous up-move. There is also a cluster of resistances between 409 (50-weekly exponential moving average [WEMA]) and 415. The KST cycle (on the weekly chart) continues to ride its positive crossover and is currently trading above the zero line, whereas the daily KST is showing signs of negative divergence. Hence, we are maintaining a cautiously bullish stance. The reversal level has been tightened to 368.
Trend Up since 08-12-08 Trend Reversal 368 Supports 368.9/384 Resistances 409/415 Target 415
Gold Weekly close: $916.05 Gold has breached the falling trend line from $1,005 in the previous week and has closed in the green second week in row. Prices are rising in a channel, the resistance for which is at $935. The yellow metal is trading near the head and shoulders pattern’s neckline, and as long as it is unable to breach the neckline at $930, there remains a downside risk. The KST cycle on the daily chart has moved in the positive zone after a positive crossover of the moving average. The weekly KST however remains in sell zone and the monthly and quarterly cycles too are suggesting downward momentum. We continue our bearish bias on gold with reversal above $952 (61.8% retracement) and target of $800.
Trend Down since 03-02-09 Trend Reversal $952 Supports $890/864 Resistances $935/950 Target $800
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Braveheart’s Best (Commodities)
Silver Weekly close: $13.98 Silver blasted off during the week after breaking out of falling wedge pattern, and retraced 79% of the fall from $14.60 to $11.80. The KST cycle on the daily chart has sharply entered the positive zone, but on the weekly and monthly charts the same remains a drag. We have been stopped out on our view in the previous report, however we continue to maintain a bearish bias, as we believe this is only a pullback of the overall down-move. Only on a break above $14.60 will we be changing the bias. The modified reversal is now pegged at $14.60 (March 2009 swing high) and the target is toned down to $12.70.
Trend Down since 03-02-09 Trend Reversal $14.60 Supports $13.80/13.33 Resistances $14.13/14.60 Target $12.70
Copper (Comex) Weekly close: $2.15 Copper traded volatile during the week making two-sided moves, but managed to close in the green posting marginal gains. On the weekly charts, the final target of $2.38 remains to hold, however on the daily charts, such volatile movements are non-confirming. The red metal continues to trade in a rising channel with resistances at $2.235 and $2.385. The higher degree time frames continue to show underlying strength in the metal. The momentum cycle on the daily chart is now showing signs of negative divergence, although it remains in a positive zone. Looking at the price moves and the momentum oscillator, we are becoming cautiously bullish and recommend unloading of long positions on rallies. We are maintaining the target of $2.385 and reversal at $1.90.
Trend Up since 08-12-08 Trend Reversal $1.90 Supports $2.06/1.90 Resistances $2.24/2.38 Target $2.38
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Braveheart’s Best (Commodities)
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May 11, 2009
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Braveheart’s Best (Commodities)
Crude Weekly close: $58.63 After breaking out of consolidation range, crude prices have rallied rapidly to breach past the previous major resistance at $54.66 to test $58 mark during the week. The momentum oscillator is moving higher albeit with some signs of negative divergence on the daily chart. The weekly picture continues to remain positive. Crude is on the verge of completing an impulse move and an imminent correction of the up-move is expected. Hence, we remain cautiously bullish in the near term. The target of $60 (23.6% retracement) remains intact. We are however tightening the reversal level to $53.50.
Trend Up since 02-05-09 Trend Reversal $53.50 Supports $55.50/53.50 Resistances $58.75/59.50 Target $60
Jeera Weekly close: Rs11,777 After a doji candlestick pattern on the weekly chart in the week prior, jeera prices plummeted during the week, breaking below 12,000-mark and closing below it. With that, the prices have broken below the rising channel and the same are now expected to test lower levels going forward. Jeera has however managed to close above the key moving average of 21-WEMA and 50-WEMA. The momentum oscillators have gone into a new bearish cycle with the trigger coming in the last week. We continue to hold our bias down for the target of 11,500 with reversal above 13,100.
Trend Down since 20-04-09
Trend Reversal Rs13,100
Supports Rs11,585/ Rs11,500
Resistances Rs12,435/ Rs13,100
Target Rs11,500
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May 11, 2009
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Pepper Weekly close: Rs12,677 Pepper on the National Commodity and Derivatives Exchange of India traded feeble during the week, however its range was narrow. Pepper is now expected to continue its downswing, and it will do the equality target of the previous downswing targeting 11,700. The momentum on the daily chart has weakened, whereas on the weekly chart it is still quite strong, however with the price damage the momentum has come down. For the current week, we expect further weakness in price and a test of the 21WEMA and 50-WEMA is on the cards. We continue to hold our bias down for the target of 11,700 with reversal pegged at 13,625 (April 2009 swing high).
Trend Trend Reversal Rs13,625 Supports Resistances Target
Down since 20-04-09
Rs12,375/ Rs12,000
Rs13,220/ Rs13,625
Rs11,700
Soybean Weekly close: Rs2,170 Soya bean price has moved down after testing the all-time high of 2825 during the week. This makes it a contender for a potential ‘double top’ reversal pattern. The 2830 mark now remains a key resistance level that bulls need to surpass to regain hold of the market. The weekly momentum oscillator was showing negative divergence and is on the verge of triggering a sell crossover of the moving average. The daily oscillator has gone into sell mode, and hence the bears can put pressure on the market. This week, we expect a breakdown of the rising trend line and thus a breakdown of this sharp upturn since November 2008. The target of 2,300 (38.2% retracement of the up-move from 1,520 to 2,825) remains intact and the reversal is pegged above 2,850.
Trend Down since 13-04-09 Trend Reversal Rs2,850 Supports Rs2,520/ Rs2,300 Resistances Rs2,775/ Rs2,825 Target Rs2,300
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