WTI OIL - Correction underway
NGAS NL - An exit from the 4 months old pattern expected soon
GOLD - Close to long-term buying opportunity
COPPER - Trading under support
SUGAR - New highs or inverted flat
WHEAT - Touched the long-term uptrend
WTI pushed a bit further than expected last week, but our view remains unchanged; the upswing from the $63 low in May is complete, and the market has recently entered a correction which should take prices down ideally to the $80 previous breakout level within one to three months.
NL Nat Gas has been congesting in a weird triangle for over four months. Triangles are usually continuation patterns and a downward breakout on this sole basis should be expected, especially since the market has not been able to trade above the strongly declining 200dma. On the other hand, the market dropped a whopping 93% from the Aug 22 high to the June 2023 low and a base could be in the making. We therefore expect - as the main moving averages are converging - a strong move soon, with a bullish bias. However, a continuation of the down move can’t be ruled out.
With the main moving averages converging, we were expecting a strong move last week, albeit to the upside! The market has now retraced 50% of the preceding $1614 to $2062 up move, is sitting at the bottom of the trend channel and near the $1805 pivot level. RSI is oversold and MCD is near record lows. For all these reasons, we believe gold to be close to a long-term buying opportunity.
Copper is breaking below the support of the awkward triangle it’s been trading in for the past year as the moving averages are in bearish positions. As the pattern isn’t clear, the targets are far from obvious, but the October 22 low @ $330 seems reasonable.
The up move from the $22.06 low unfolded in two waves. Either the market holds the July high at $25.37 and heads to new highs, or the entire structure from the June high (at $26) is an “inverted flat”, in which case, March Sugar should trade down to the $22 level again before heading higher. We have a slight preference the second scenario.
Wheat broke new lows last week but went to test the long-term uptrend connecting the major lows since 2016. While the $540 low could be re-teste or even marginally penetrated, we believe Wheat to offer a solid long-term buying opportunity.
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About the Author: Joachim DJIAN
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