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SINGAPORE, March 11(Reuters) – Sixth month Tokyo rubber is expected to end the current sharp fall around 380 yen per kg and resume its long-term uptrend towards 535.70 yen over the next four weeks.
Trading on TOCOM was reported as normal on Friday after a major earthquake hit northeastern Japan. [ID:nTKU000086]
The current major bull trend is considered as the second leg of a rise that started from the November 2001 low at 62 yen. Labeled as a wave “C”, it is expected to eventually arrive at 576.90 yen — the 161.8 percent Fibonacci projection level, based on the length of the wave “A”.
The sharp fall from the Feb. 20 high at 535.70 yen only triggered a wave “IV” correction, which is expected to end around 380 yen, the 38.2 percent Fibonacci retracement on the rise from 128 yen to 535.70 yen.
A fall below 380 yen to 360 yen would extend to 331.90 yen, the 50 percent Fibonacci retracement.
TOCOM gold is due for a correction to 3,479 yen per gram over the next four weeks, based on its wave pattern and the RSI indicator.
A five-wave cycle could be approaching an end, with the wave “5” forming a rising wedge, which is generally a topping pattern at the end of a rally.
There are multiple bearish divergences on the RSI indicator, strong suggesting the exhaustion of the rally.
The downside could be extended to the presumed wave “4” trough of 3,246 yen should gold dip below 3,479 yen.
A surge above 3,970 yen will open the way towards 4,200 yen.
Source: Reuters