Technical View: Gold Outlook Weak; Faces Resistance At $1,113/oz

COMEX Spot Gold CMP:  $1,101/oz
Strategy: Sell @ 1,101 (CMP) | Stop @ 1,113| Target @ 1,050—976—948
Reversal Buy Above 1,113 | Stop @ 1095 | Target @ 1130 - 1151 - 1183

The technical chart indicates that gold is in a downtrend and the yellow metal is likely to remain under pressure if prices fail to cross the resistance level of 1,113 on the higher side on daily closing bases. COMEX Spot Gold is currently quoting at $1,101/oz.

Gold declined from high of 1,183 (Point A) in October 2015 to test the low of 1,046 (Point B) in December last year. Thereafter, gold witnessed a consolidation phase, with prices moving in a range of 1,046 and 1,080.

The immediate support for gold is seen at 1,050 and if it breaks this level then prices would weaken further.

According to the technical chart, the difference between Point A and Point B is 137 points and considering 100% of this difference from 1,113 (Point C), the downside target comes to 976.

A fall below this level may take prices down further to 948 levels, which is 121% of the difference between Point A and Point B.

Gold’s downtrend remains intact unless prices cross the resistance level of 1,113.

However, if gold reverts from the current level and crosses the resistance level then prices may rise towards 1,130-1,151 levels, which are 61.8% and 76.8% retracement of Point A to Point B, respectively.

Zinc Chart

WTI Crude Oil: Downtrend Likely To Continue

WTI Crude Oil (Nymex) CMP:  $36.20/bbl
Strategy: Sell @ 33 (CMP) | Stop @ 38.5| Target @ 26.9 — 25 — 21.4WTI Crude Oil technical chart indicates that prices will continue to decline in the coming sessions if it fails to cross the resistance level of 38.5 on daily closing basis. It is currently quoting at $33/bbl, below the previous bottom of 34.5 (Point Y).

The Long term chart shows formation of A-B-C Pattern with wave C in continuation, Where as the short term chart is forming Rising Wedge Pattern continuation, trading below the breakdown level of 35.9 which indicates correction in prices to continue.

WTI Crude Oil fell from 43.5 (Point X) in November end to the low of 34.5 (Point Y) in Mid December last year. Thereafter, prices went in to consolidation phase and retraced over 50% of the fall from Point X to Point Y and touched 38.38 on the higher side, before resumption of downtrend.

WTI Crude Oil is expected to decline further from the current levels if it sustain below the level of 36.

The difference between Point X and Point Y comes to 9 points. Considering 100% of this difference from breakdown point Z @ 35.9, the downside target comes to 26.9 level. Thereafter, the next target could be 25 and 21.4, which are 121 and 161% of the same difference.

However, if WTI Crude Oil reverts from the current level and crosses the resistance of 40 daily on closing basis then prices may rise towards 51 level. 

WTI CRUDE OIL - Strategy: Sell @ 33 (CMP) | Stop @ 38.5| Target @ 26.9 — 25 — 21.4

WTI Crude Oil (Nymex) CMP:  $36.20/bbl
WTI Crude Oil: Downtrend Likely To Continue

WTI Crude Oil technical chart indicates that prices will continue to decline in the coming sessions if it fails to cross the resistance level of 38.5 on daily closing basis. It is currently quoting at $33/bbl, below the previous bottom of 34.5 (Point Y).

The Long term chart shows formation of A-B-C Pattern with wave C in continuation, Where as the short term chart is forming Rising Wedge Pattern continuation, trading below the breakdown level of 35.9 which indicates correction in prices to continue.

WTI Crude Oil fell from 43.5 (Point X) in November end to the low of 34.5 (Point Y) in Mid December last year. Thereafter, prices went in to consolidation phase and retraced over 50% of the fall from Point X to Point Y and touched 38.38 on the higher side, before resumption of downtrend.

WTI Crude Oil is expected to decline further from the current levels if it sustain below the level of 36.

The difference between Point X and Point Y comes to 9 points. Considering 100% of this difference from breakdown point Z @ 35.9, the downside target comes to 26.9 level. Thereafter, the next target could be 25 and 21.4, which are 121 and 161% of the same difference.

However, if WTI Crude Oil reverts from the current level and crosses the resistance of 40 daily on closing basis then prices may rise towards 51 level.