Month: August 2012

Here's a fresh look at MCX commodities and what to expect in the coming week.

 

Crude Oil September :

 

 

Crude has been on a big bull run and the month of August has seen crude rise from 4932 to 5425.

 

The Profile chart above shows volume developing at 5412 on Thursday and 5380 on the composite picture in grey at the right of the chart.

 

There is also a low volume zone at 5280 on the charts.

 

The chart suggests a "buy the dip" till this level of 5280 is protected. Upward Momentum can accelerate only above 5380 however towards 5412 and 5470 which should cap upsides for the week.

 

Below 5280 we can see a move to 5237/ 5219 which will be the final test for buying strength.

 

Copper M August Future :

 

 

 

Copper traded above resistance at 419.5 for the first time in this month and invited prompt short covering.

 

The chart shows buyers wanting to push the market now to 431 with a small resistance near 428.

 

Dips near 419.5 and 423.5 will be bought through the week.

 

Natural gas August Future :

 

 

Natural Gas continued to trade sideways in a 10 point range with selling pressure building at 161 and buyers at 150.3.

 

The week low at 149.3 and the closing of 150.3 continue to be important supports below which 140.5 can be seen easily.

 

resistance now placed at 156 and 161.90.

 

Silver Large Sept Future :

 

 

Silver is near 57700 previous resistance and consolidated on Friday.

 

The move from Tuesday is clearly extended and a pull back due.

 

First sign of weakness will be a trade below 56760 below which levels of 55700 and 55330 are expected.Further down it is not expected to trade below 54500 which is the place for all dip buys in the coming weeks.

 

Gold Large October :

 

 

Like Silver, Gold is also due for a pull back early in the week.

 

The critical level to watch for consolidation or pull back if any is 30630. A trade below that is expected to bring 30350.

 

Supports lower are at 30220- 30150.

 

 

 

MCX Weekly check

Here is a re-look at a chart I had posted about 2 weeks back on the BankNifty in this post here-  : https://www.vtrender.com/content/bankniftys-distribution

 

 

In that post – the market would move to efficiency by operating within the low volume zone for a few sessions.This zone is roughly 10370- 10530 on the spot and volume filling is required here.

 

Here is an updated chart :

 

 

The volume is beginning to be centered around 10500 spot and writers of the 10500 straddle have seen the straddle dip from 395 to about 270 currently.

 

The best part is that the process of filling up is not done yet and the straddle will see more gains.

 

 

Filling up

Here are some updated charts of the commodities we track

 

Natural Gas August future :

 

 

NG had a good rum above 165 and just when it looked poised to scale 200, the seller stepped in at 180 levels and at the close of this trading week has managed to push it below the breakout level and into the previous balance zone.

 

The chart above shows dpoc in white and vwap in orange

 

Clear resistance now is at 162- 164 with support coming near 150.7

 

The mini composite in green purple on the right of the chart shows value being accepted below 168 now and 168 and above will be the minimum condition for swing longs

 

Below 150.5 a move to 140/8 will begin.

 

Crude Oil August future :

 

 

We spoke in the trading room on how extended crude was in the shorter time frame after the big move up from last Mondays' 4950 levels.

 

Crude got defended at 5090 on Friday where is the value high for the rise.Staying above 5090 during the week will make buyers come back to buy all dips. However a break of 5070 can invite 4992 again.

 

The chart shows a clear uptrend however and is likely to continue if prices stay above 4900 in the medium term.

 

Copper Mini August Future :

 

 

Unlike the crude chart above Copper has not been able to hold on to levels above 430 where it has met with heavy selling.

 

Chart shows prices below a declining vwap and dpoc which is a big indication for sell on rises.

 

However buyers have stepped to defend prices below 407.

 

Overall the profile shows a balance developing between 430 and 407 with a composite POC around 420 pushing price 10 points either side.

 

Gold Future October :

 

 

Gold remains between two high volume nodes at 30400 and 29600 marked as white bars in the chart above.

 

Shorter term the immediate dpoc at 29940 and vwap at 30030 will keep price fixed around here for some more time.

 

The smaller range for day traders is 29840 to 30180.

 

A move above 30180 should challenge 30480 again.

 

Silver Futures September contract :

 

 

Silver is more weaker than Gold meeting sharp sellers near the Orange vwap line at 54500.

 

54500 is also a Low volume zone and is marked out in the chart as pink showing rejection of price there.

 

Lower down 52400 levels and below are meeting buyers and a move above 53500 will give 53800 and 54300 all over again.

 

 

 

Trading with NG/ Copper/ Crude/ Silver and Gold

Here's a chart of the BankNifty spot showing the distribution of the past 2 months.

 

 

The Profile is a DD or a double distribution as it operates in the low volume zone in between the 2 distributions.

 

You can find a definition for DD at this link- https://www.vtrender.com/content/double-distribution-dd-0

 

The above chart is not for the day time frame, but the concept is still valid.

 

Under such situations, the market would move to efficiency by operating within the low volume zone for a few sessions.This zone is roughly 10370- 10530 on the spot and volume filling is required here.

 

A look at the option picture in BankNifty show that the 10500 strike is still call heavy implying g heavy resistance there, though there is evidence this morning of the strike cooling off a bit.

 

BankNifty’s distribution