One should use rangebound trading strategy in trading gold while on the other hand, one can buy copper October futures and crude November futures.
Pritam Kumar Patnaik
Gold has been consolidating after touching high at Rs 32,310 in the mid of October 2018. This rangebound action is going on at an important juncture and hence one should keep an eye on important support and resistance levels.
The metal has gained due to buying in the international market which is trading near $1,240 and USD/INR rates which as of now is consolidating in the range of 74.5 and 73.1.
The overall bias for USD/INR is going to remain positive which will support gold prices whereas international gold is likely to move sideways to positive with $1,225 as support and $1,250 as resistance.
MCX Gold Futures Daily chart
The above daily chart of MCX Gold shows that narrow range movement is happening at the channel resistance and thus we require close above Rs 32,310 to confirm further positivity.
As long as Rs 31,765 is protected on the downside where 20-day EMA is placed, the trend will remain positive.
Strategy: One should use range bound trading strategy with Rs 31765 as support and Rs 32300 as hurdle on upside.
Outlook on Copper
Copper has seen sideways to negative action from last few days. In this trend, Channeling Technique is working well to spot the buying and selling areas.
The 60 mins chart below shows prices have been intact in the downward moving channel and as of now, it has arrived at the channel support.
As long as prices are contained within the channel, one should buy near the channel support sell near resistance areas.
MCX Copper November Futures 60 mins chart
Relative strength index (RSI) is also showing positive divergence which suggests that downside momentum is reducing.
On downside, Rs 440 is crucial support whereas Rs 455 is the channel resistance.
Strategy: Buy Copper November 2018 Futures in the range of Rs 444 -442 with Rs 440 as stop loss and target of Rs 455.
Outlook on Aluminium
Aluminium prices corrected from the high of Rs 167.8 in the start of October 2018 to the low of Rs 143.6 in the recent week. This has brought prices at the important support zone.
MCX Aluminum October Futures daily chart
The above daily chart suggests prices have broken the lower trendline of upward moving Expanding Triangle pattern. The commodity has tested the next support zone of Rs 144-143.5.
Looking at the bar size, we can say that momentum on the downside is reducing which suggests the downward trend is at matured stages. Thus, one should be alert now as reversal can happen on the upside.
Any daily close above Rs 146 will provide first confirmation that uptrend has started. On downside Rs 143.5-143 is the important support zone.
Strategy: One can buy Aluminium October 2018 Futures in the range of Rs 145.5-144.5 with Rs 143.5 as support and target towards Rs 150 can be expected.
Outlook on Crude Oil
Crude has corrected sharply from the high of Rs 5,669 to the lows near Rs 4,850-4,830. After that, the prices have been moving in short-term consolidation and from the medium-term perspective, it has arrived at the crucial juncture.
MCX Crude Oil Futures daily chart
The above daily chart shows prices have been intact moving upward and creating Expanding Triangle pattern where it has been testing the lower trendline support.
Looking at the trend of the last few months, we can assume prices will respect trendline support this time also. Hence, on the downside Rs 4,800 looks important support where the intersection of blue as well black trendline is placed.
RSI has also arrived at the zone from where reversal was witnessed earlier and thus one should be alert now.
A near-term close above Rs 5,000 followed by Rs 5,100 will indicate that trend has reversed on upside towards Rs 5350.
Strategy: Buy Crude November 2018 Futures on close above Rs 4,980 with Rs 4,900 as support and target towards Rs 5,100 can be expected.
The author is Head of Reliance Commodities.Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.