Buy crude October Futures, silver December futures: Reliance Commodities

Pritam Kumar Patnaik

MCX Silver December Futures Daily chart:

Outlook:

Silver prices have been moving in a consolidation mode after the sharp rise witnessed from the low of Rs 36,423 level made in the month of August 2018.

It seems that prices are digesting the prior gains which is a positive sign over near term.

MACD (moving average convergence and divergence indicator) has continued to show buy signal and as of now there are no signs of worries.

10 days exponential moving average (EMA) has been sustaining above 20 days EMA which signals towards strength in prices.

On a weekly basis, there is formation of inside bar (from last 2 weeks) which has protected the prior bars low which suggests positivity.

On downside Rs 38,330 is the crucial support and as long as this level is intact trend will remain positive.

We can expect move towards Rs 40,200 in coming days.

Strategy: Buy Silver December futures contract in the range of Rs 38,750-38650 with Rs 38330 as stop loss and target towards Rs 40,200 is possible.

MCX Aluminum Futures Daily Chart:

Outlook:

Aluminum has showed sharp downward movement from the high of Rs 167.80 made in the start of October 2018 to the low of Rs 147.95 level till now. This is almost 20 rupees correction from the highs and this has brought prices at the important support zone.

The above daily chart shows that prices are intact in Expanding Triangle Pattern and as of now it is reaching close to the trendline support.

The daily bar size is constantly decreasing from last few days which suggests that momentum on downside is reducing and thus it is time to be alert as prices can take sharp reversal anytime.

50 days Exponential moving average (EMA) has provided important support zone in past. Hence price action near this zone will be crucial to watch.

On downside Rs 146 is the crucial support trendline is placed.

In short, move above Rs 150 level will indicate that trend has reversed on upside and then trend towards Rs 155-156 level is possible where 38.2 percent retracement of the prior down move is placed.

Strategy: Buy Aluminum November futures contract in the range of Rs 148-147 with Rs 146 as stop loss and target towards Rs 155-156 is possible.

MCX Crude Futures Daily chart:

Outlook:

Crude prices have corrected sharply in recent week from 5320 to the low of 5060 level till now. Post the same it is moving in a consolidation zone.

Consolidation is very much required after the sharp fall or sharp rise. It gives market a time to take a breather sign and accordingly post the consolidation it can start to trend in prior direction. So in current case we can expect Crude to move lower once this range bound action is complete.

The above 60 mins chart shows that prices are intact in downward moving channel, so as long as we do not see break above the channel resistance, trend is going to be on downside.

50 periods Exponential moving average (EMA) is acting as resistance to the down move and as per this zone of 5200-5225 will act as important resistance.

In short, Crude trend remains on downside with 5225 as resistance. Move below 5060 will resume down move towards 4900 levels.

Strategy: Sell Crude November Futures contract in the range of 5140-5150 with 5225 as stop loss and target towards 4900 can be expected.

MCX Natural Gas November Futures daily chart:

Outlook:

Natural Gas has been moving in a range bound action from last few days. Within this range volatility has increased due to which intraday trading becomes challenging.

The above daily chat suggests that after the sharp rise, it is moving in a consolidation to relieve the overbought level of RSI. This also suggests that post the same market can start to move higher.

As per Elliott wave theory, prices are trading in wave 4 and post the same it can move higher in form of Wave 5.

20 days Exponential moving average is proxy for the same which is providing crucial support to the uptrend.

236 is the crucial support over near term and as long as this level is protected, trend will remain on upside.

In short, break above 250 level will infuse buying pressure and then trend towards 260 level is possible.

Strategy: Buy Crude October Futures contract in the range of 242-239 with 236 as stop loss and target towards 250 followed by 260 level can be expected.

The author is Head of Reliance Commodities.