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Gold Technical Trend Analysis- 4March13

, March 4, 2013, 0 Comments

Prices in MCX Gold have been in sideways since November 2012 after making a high of Rs. 32441 in the month of September 2012. Rs. 32,441/- is the life time high made in MCX Gold in rupees.

As per the MCX Gold chart deciphering is concerned the MCX gold prices starting from the left corner of  the left hand side at Rs.7800/- in January 2005 and then immediate monthly low of Rs.6022/- in July  2005 paved way for an uptrend in the precious metal counter MCX Gold monthly chart. One can observe a well modulated up-trend from the high of Rs 7800/- January 2005 & a low of Rs.6022/- made in early July 2005. By joining subsequent peaks & troughs an uptrend structure in MCX Gold can be observed with higher highs and higher lows within this up-trend channel. The MCX Gold prices higher highs within the uptrend channel are Rs 9966/-, Rs.13426/-, Rs.19302/-, Rs.28500/- & Rs.32441/- in September 2012 & the lower highs within this up-trend channels are at Rs.9289/-, Rs11599/-, Rs,16142/-,Rs.21050/- & Rs.27500/-(indicated support).

Technically MCX Gold uptrend channel from January 2005 till now indicate a perpetual of secular bull market for the precious metal MCX Gold. Even if from September 2012 MCX gold prices seem tapering/going down or can be said to be in sideways trend, but as long as the uptrend channel is intact the MCX Gold can be said to be in cyclical bull market or bullish trend.

Volume can be seen rising with rise in the price of MCX Gold. The volume high in MCX Gold was at price Rs.28500/- after that the volume can be observed to be tapering in the precious metal MCX Gold though the MCX Gold prices continued their price upwards. Now within this well modulated uptrend channel as long as MCX Gold prices continue to raise/rise the MCX Gold technically can be said to be enjoying cyclical bull market & the 2trend lines of this uptrend channel acting as support & resistance to higher highs and higher lows in this precious metal counter.

The momentum indicator KST is in over bought zone and now falling before making indicator peak high around January 2012 with price peak high in MCX Gold around August 2012. Falling KST indicator indicate upside momentum seems to be waning. Though MCX Gold prices are still high and KST indicator is falling, but still in overbought zone. A positive divergence can be hinted at in this precious metal counter. The Bulls are still in control, but seem to have surrendered to the bear pressure at least for now.

Technical Conclusion: Technically primary uptrend is intact in MCX Gold prices. Unless technically the uptrend channel is not broken decisively the primary trend in the counter is up only. In coming months MCX gold prices hints at lower price action & might bottom out by taking support at the labyrinth of  MCX Gold uptrend channel at around Rs.27500/-

Invest or not to invest: An investor can buy Gold at uptrend channel support in Spot gold counter, but a positional MCX Gold buyer may wait for right technical call. In MCX Gold shorts are risky as basic & stronger trend is up.

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Disclosure: I wrote this article myself, and it expresses my own opinions.I have no positions in MCX Gold and no plans to initiate any positions within the next 72 hours.

 






About author
Suchita holds a Bachelor of Science Degree from MSU University, Baroda, Diploma in Financial Management from Xavier's Institute of Management, Mumbai and has undergone Comprehensive Program on Technicals Analysis from Bombay stock exchange. ...more