MCX Gold closed at 39,740 last week. It is not very often that we see such a steep rise in precious metal and it only indicates a strong trend is underway.
Ashish Kyal, CMT
Gold has been the asset which has given exorbitant returns over the shortest possible time frame. That is the power of third wave.
MCX Gold closed at 39,740 last week. It is not very often that we see such a steep rise in prices of precious metal and it only indicates a strong trend is underway.
The below article describes the wave third extension pattern of the Elliott wave principle. Prices are currently in wave iii of 3 and it is not going to end anytime soon.
Usually Commodity witnesses largest wave 5. This is the reason why MCX gold is seen rising higher and higher since the past many sessions.
Currently, the intermediate degree wave (5) is ongoing within which sub-wave 3 seems to be extended as shown on the daily chart. Internal counts suggest that prices are moving higher in the form of wave iii of wave 3.
The trend for MCX Gold remains positive with immediate support placed at 38,200. If this level is held intact on a closing basis, we can expect the prices to move higher and test newer highs.
A move below 38,200 will only indicate wave iv consolidation is starting before a trending move emerges again.
3rd or 5th Wave extension looks like in a bull market in the above research. An extension is an unusually long impulse wave with exaggerated sub-waves, according to Frost and Prechter.
Many impulses contain only one extension in their sub-waves. That is, only one of the wave’s one, three, or five, will be extended. The sub-waves within an extension have nearly the same duration and amplitude as the ones in the rest of the wave.
(The author is Founder & CEO, Waves Strategy Advisors.)Disclaimer: The views and investment tips expressed by investment expert on moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.