Precious Metals & Crude Oil Weekly Outlook – 14th Sep 2012

Posted By : Kishore B.S

GOLD:

Gold Technical Chart

 

Gold after its dream rally from the price levels of 30000 to current price levels of 32000 is facing some resistance to further higher levels. The reason for the same is that the metal has appreciated by nearly 10% within a small time frame of a month.

The charts above are indicating that the Metal is now in the over bought territory and the Indicators are also indicating that the rally might get into some turbulence now, with the MACD hovering around the 400 mark, and the stochastic too around the 90 mark both are pointing that some correction or consolidation at current price levels cannot be  ruled out which could bring down the price to near the first support level of 31500-31200 soon.

However if the metal crosses the resistance price level of 32100 then it would further rally into unchartered territory with price target of 32400-32600 easily.

 

SILVER:

Silver Technical Chart

 

Silver too which followed the yellow metal into the rally infact has performed much better than its superior by appreciating by nearly 22% from its lows of 53000 to current price levels of  64600 levels.

The rally as indicated in the charts above have been forming a rising wedge pattern and if the price dips below the blue lines then the pattern would be confirmed too. If this price pattern is confirmed then the metal could easily retrace its rally to the first support price levels of 60000 post which it would consolidate or further dip to the 57000 levels which would from the 61% retracement.

As the charts are indicating the metal is facing a resistance at its previous highs of 65000 levels which can be used to short the metal with stop loss of 65500 levels.

Crude Oil:

Crude Technical Chart

 

Crude Oil has been the most volatile and actively traded Energy commodity since the prominent Gulf crisis of the 1970’s. The world today cannot be imagined without this particular commodity on which most of the world Economic growth is reliant upon.

Crude has come into prominence from the past 5 years as an investment avenue during the period of Crisis and has served as a good Portfolio stock for balanced investors.

The charts for the same are given above wherein it clearly points to the fact of consolidation between the price range of 5270-5440 levels for the last one month, after the rally from the 4900 price level to the 5400 levels.

The charts are indicating that the consolidation is infact bullish going by the pattern of likely formation of a Flag pattern which would be confirmed on a breakout above the 5440 level.

If the pattern is confirmed the target could easily be around the 5660 levels within a month and a breakout below the 5270 levels could trigger a sell off to the 5160 levels easily.

Given this view, it would be ideal to wait for the confirmation of either of the breakouts and trade accordingly.

(Inputs: Mr. Hemanth.V, Faculty TA, Stock Market Institute – Bangalore)

Cheers!!

Team SMI

www.stockmarketinstitute.org

Leave A Comment