Sell MCX Gold, Crude December futures on rallies: Reliance Commodities

Sell MCX silver December 2018 futures on rallies towards Rs 36,300 and MCX Gold December 2018 futures on rise towards Rs 30,600, says Pritam Kumar Patnaik of Reliance Commodities.

Outlook: The gold price has continued to tumble in the last week and this down move has also broken the support of Rs 30,500. This suggests that negativity can continue in the coming weeks.

The daily chart below shows prices are intact in the downward black channel as per which it has more space to cover on the downside. Also, the major support as per upward moving blue channel is placed at Rs 30,000 level. Hence, we expect prices to move lower towards Rs 30,000 levels.

From last few sessions, the 5-day and 10-day EMA has been acting as hurdles to the rise. Thus bearish trend can continue in this commodity.

International gold prices are showing negative signs after testing $1,230 on the upside. Hence, down move in International gold prices as well as appreciation in Indian rupee can continue to keep MCX Gold under pressure.

Strategy: Sell MCX Gold December 2018 futures on rise towards Rs 30,600 with Rs 30,740 as stop loss and target towards Rs 30,200 can be expected.

Silver

Outlook: MCX silver December remained in weak trend for the fifth consecutive week and formed bearish candlestick pattern. Last week, it lost around 3.54 percent. Prices are now trading at the psychological support level of Rs 36,000.

The daily chart below shows prices have been intact on the downward channel and as per this channel, it still has more space to cover on the downside. Thus it is better not to catch the low in this commodity.

The 15-day EMA is acting as resistance to the down move, therefore if we do not see close above this EMA, the trend will be bearish.

RSI has reversed on the downside from 40 and as per prior trend, it can move towards 25 which is negative for prices.

Strategy: Sell MCX silver December 2018 futures on rallies towards Rs 36,300 with Rs 36,800 as a stop loss and a target of Rs 35,200.

Crude oil

Outlook: Last week was the seventh week where crude oil price remained under pressure and made a low of Rs 3,574. From the high of Rs 5,669 in the month of September 2018, it has fallen 37 percent till now in a short period. Such moves do not provide a good signal from medium term-perspective for the global economy.

The weekly chart below shows it has violated the upward moving channel support, however, it will be crucial to see if it closes below Rs 3,574 or not. Any close below this will further drag prices towards lower levels.

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