Elliott Wave Analysis of Natural Gas Futures traded on MCX India.
To be honest, this is the first time I am looking at this contract, and what I see is fascinating. There were so many easy opportunities to trade the Natural Gas Futures profitably on the MCX in India!
So what do the Waves tell us? First of all, we can see a clear five wave down move on the left of the chart. There was an extended 3rd of the 3rd wave, a move that covered 4.618 times the distance of the first wave. Next, you would have prepared yourself for a complex correction because the 2nd wave was simple. Sure enough, you got an irregular ‘B’ wave. The 4th wave ended nicely at the 38.2% retracement level of the 3rd, and the final 5th wave also finished at a technical level (50% of the distance from 0-3).
You would have gone long the Natural Gas futures contract near the end of the 5th wave. There was a bit of choppy correction that ensued, because the B wave also was an irregular correction, but hey-presto, it finished at the 50% retracement level. Anyone who was patient could have loaded up nicely near there (waiting to add at the 61.8% lvls, but which never showed up!). Then we embarked on the “C” wave, which I think has just finihed its own 4th wave, and we are in the fifth wave of this move. So it is rather late in the day to consider buying now. Rather one will watch to see what happens near the 210.60/80 and sell there if the momentum fades.
That concludes this short lecture on Natural Gas Futures on the MCX in India. Share it with all those whom you think want to learn how to trade commodities using Elliott Wave Analysis.
Update on 29 August 2019:
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8 Comments
Hi Sir,
Posting here after a long time.
I have a small query which I feel most of the fellow followers of this blog would have. The chart posted has a lot of gaps and the five wave patterns are not clearly visible. Natural gas is traded 24 hrs while in India it’s not so & USDINR’s move has an impact on the MCX traded natural gas. So gaps will be there. My query is how do you count those movements. For example, the red 1 & 5 on your the chart posted are not very clear 5-waves. Your answer would help us on our learning curve.
Hi Muthu, When there are gaps in data, it becomes a problem. Fortunately, in the chart of Natural Gas, it all tied in nicely. Importantly, you are looking at an Hourly Chart here, and we often won’t be able to see the tiny waves inside. Ultimately, it boils down to judgement, and that is where some experience might come to one’s rescue.
Sir, May i request you to clarify on chart timeframes (5min, hour, eod etc) to be followed while applying elliotwave analysis. For example, if a day/positional trader wants to take position which timeframe is to be followed. I have seen experts use different charts (yearly, monthly, hour etc) when updating their views. Please excuse my ignorance and if time permits please clarify.
Hi Ravi, you cannot trade intraday with a long term chart. But long term charts give you a sense of direction, and an indication of where we are in the big picture. Typically one starts from. Longer time frame and zeros down to smaller time frames in order to time one,s entry.
Can you please tell me from where did you get this chart? One more question, since I follow MCX Gold price I would like to know which contract do i follow and on what time frame since multiple contracts are open at the same time?
Pankaj, the chart of Natural Gas came from Reuters. As for MCX Gold, I really don’t know because I am not active in Indian markets. Suggest you speak to a local broker. The most active contract should be the one you should use. Good luck.
Hi Ramki,
Just wondering why have you stopped posting about NG futures. I find it a very manipulated counter so it would be nice if you would continue your wave count.
Nice write up on gold and INR.
regards
Sim
Sim
sir please give your update on natural gas.i think third wave is in progress with target of 3.6.sir,do you see 3.6 0r 4.4.please update