The first chart I want to discuss is that of
crude oil. Crude prices have seen almost a 20% correction in last two months
and are currently trading at 94 levels.
In my last post on crude oil on 10th August 2011 I
wrote that, “Lastly crude oil has broken out the
consolidation pattern it was in since April 2011. I have not expected an upside
breakout of this triangle. If crude oil persist above 95 levels than we will
see sharp up move in prices. Although my gut feeling is that the breakout is a
whipsaw and crude prices should fall below 100 USD before year ends given that
there are no unfavorable geo-developments.”
Crude oil moved up to 115 levels and has
crashed to 93 from there. I still believe that crude oil will close the year
below 100 USD level and see a sharp correction in next year. The target for
Crude stays at 70 dollar.
I have been bullish on gold and in my last post
on 14th
September I wrote, “If we look at the given
chart of gold we can see that gold has done its 50% retracement at 1307 levels
and I expect gold to start a new upmove from these levels. Traders can buy gold
at CMP keeping 1270 as stop loss and 1485 as target.”
Since then gold has been range bound and had
not shown any tendency to move up. Although my stop loss has not been trigged
as of now, nevertheless the probability of an up-move has diminished greatly for
both gold and silver. All long trades on gold should keep 1270 as a strict stop
loss on a weekly closing basis. If gold moves above 1350 it may go to 1425 and 1475
levels.
On the contrary, If gold fails to move up in
the current month than it is highly likely that we will see a sharp downside in
gold and it may fall towards 1000 USD levels.
Similarly traders should keep a stop loss of
20.50 in silver on weekly closing basis. If silver falls below this level there
is a high probability that we will see a sharp down move in prices towards 14 –
16 dollar level.
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