Commodity Weekly Technical Outlook

ONG Focus - Technical

Written by Oil N' Gold | Sat Sep 26 09 09:17 ET

Comex Gold (GC)

Gold's pull back from 1025.8 extended further to as low as 985.5 last week and further decline could still be seen to 983.2 support and below. Nevertheless, downside is expected to be contained by 61.8% retracement of 931.3 to 1025.8 at 967.4 and bring rebound. Above 1001 minor resistance will flip intraday bias back to the upside for retesting 1025.8 high. Nevertheless, note that 1033.9 is needed to be firmly taken out to confirm upside momentum. Otherwise, we'd expected more sideway trading below 1033.9 in near term.

In the bigger picture, rise from 681 is tentatively treated as resumption of long term up trend. Sustained break of 1033.9 high will confirm this case and should target 61.8% projection of 681 to 1007.7 from 931.3 at 1133.2 next. While some consolidations might be seen in near term before decisive break of 1033.9, downside should be contained well above 931.3 support and bring rally resumption. However, note that a break of 931.3 dampen the bullish view and suggest that rise from 681 has completed. This will in turn indicate that such rise is merely part of the consolidation pattern that started at 1033.9.

In the long term picture, long term rally from 1999 low of 253 turned into consolidation after completing a five wave sequence to 1033.9 in 2008. Such consolidation from 1033.9 should have completed in form of expanding triangle to 681 already and rise from there is tentatively treated as resumption of the long term up trend. Sustained break of 1033.9 should confirm this case and target 61.8% projection of 253 to 1033.9 from 681 at 1160 and then 100% projection at 1460 level.

Comex Silver (SI)

Silver's fall from 17.69 extended further to as low as 15.95 last week. Break of 16.06 cluster support (38.2% retracement of 13.495 to 17.69 at 16.088) serves as the first alert that whole rise from 12.435 has completed at 17.69 already. Initial bias remains on the downside this week and deeper decline could now be seen to 15.185 resistance turned support next. On the upside, above 16.41 minor resistance will turn intraday bias neutral first. But risk remains on the downside as long as 17.345 resistance holds. However, break of 17.345 will indicate that recent rally is indeed still in progress for another high above 17.69 before completion.

In the bigger picture, whole medium term rise from 8.4 is still in progress and could probably continue towards next key resistance level at 19.55. Nevertheless, we're not seeing a clear impulsive structure from 8.4 yet and hence, we'd treat such rise as part of the long term, wide range, consolidation pattern that started at 21.44 back in Mar 08. In other words, current rise from 8.4 is expected to be limited by 19.55/21.44 resistance zone and bring at least one more medium term fall. On the downside, break of 12.435 support is needed to confirm that rise from 8.4 has completed. Otherwise, medium term outlook will be neutral at worst even in case of deep pullback.

In the longer term picture, the up trend from 01 low of 4.01 topped out at 21.44 and subsequent price actions are treated as correction/consolidation to this up trend. Fall from 21.44 completed after drawing support form 8.5 key level. However, subsequent rally from 8.4 is not displaying a clear impulsive structure yet and hence, we'd prefer the case that it's just the second wave of the wide range consolidation pattern. Another fall should still be seen for retesting 8.5 before completing the consolidation. Nevertheless, strong support is still expected at 5.45/8.5 support zone to conclude the consolidation.

Nymex Crude Oil (CL)

Crude oil dived sharply to as low as 65.05 last week after breaking medium term trend line support decisively. The development affirms the case that crude oil has topped out in medium term at 75.0 and indicates that fall from there has resumed. Initial bias remains on the downside this week and sustained trading below 65.23 cluster support (100% projection of 75.0 to 67.05 from 73.16 at 65.21) will target 161.8% projection at 60.30 next, which is close to next psychological level of 60. On the upside, above 68.02 will turn intraday outlook neutral and bring consolidation, but rebound should be limited below 71.77 resistance and bring fall resumption.

In the bigger picture, sustained trading below medium term trend line support solidifies that case that medium term rebound from 33.2, which is treated as correction whole down trend form 147.27, has completed at 75.0 on bearish divergence conditions in daily MACD and RSI. Further break of 58.32 cluster support (38.2% retracement of 33.2 to 75.0 at 59.03) will confirm this case and pave the way for a retest of 33.2 low. On the upside, break of 71.77 resistance is needed to invalidate this view. Otherwise, outlook will remain bearish.

In the long term picture, there is no change in the view that fall from 147.27 is part of the correction to the five wave sequence from 98 low of 10.65. While there rebound from 33.2 is strong and might continue, there is no solid evidence that suggest fall 147.27 is completed and we're still preferring the case that rebound from 33.2 is merely a corrective rise only. Having said that strong resistance should be seen between 76.77/90.24 fibo resistance zone even in case of another rise and bring reversal for another low below 33.2 before completing the whole correction from 147.27.