-- Posted Monday, 6 February 2012 | | Disqus

The one hundred day moving average and the two hundred moving average in crude oil is converging. My experience is that whenever the 100 day MA and 200 day MA converge there are big one way moves. If they are held then most of the time there is a one way fifteen percent to twenty percent rise over the coming weeks and months and the reverse happens when they are not held.

Below is the crude oil graph for the same.

• Crude oil 100 day MA is at $94.17 while 200 day MA is at $95.13.
• The pink circles in the above graph reflect the past convergences after which most of the times there has been big one way moves
• Crude oil prices can rise to $108 and $120 in the short term as long as they are able to trade over $94.
• If crude oil prices trade below $94 then it can fall to $78 and $73 over the coming weeks.

It’s not just crude oil where the 100 day MA and 200 day MA convergence has resulted in big moves. The same has happened in gold and silver.

COMEX GOLD

• The last 100 day MA and 200 day MA convergence around $880 in 2009 resulted in gold prices rising to $1925 in 2011.

COMEX SILVER

• The last 100 day MA and 200 day MA convergence around $1800 in 2010 resulted in silver prices rising to $4950 in 2011.

One should always look at the gap between 100 day moving average and 200 day moving average in the charts as it reflects the trend and convergence (if any) of the big one way move. This is just my experience and this may or may not hold good in the future.

Disclaimer: Any opinions as to the commentary, market information, and future direction of prices of specific currencies, metals and commodities reflect the views of the individual analyst, In no event shall Insignia Consultants or its employees have any liability for any losses incurred in connection with any decision made, action or inaction taken by any party in reliance upon the information provided in this material; or in any delays, inaccuracies, errors in, or omissions of Information. Nothing in this article is, or should be construed as, investment advice. Website www.insigniaconsultants.in

-- Posted Monday, 6 February 2012 | Digg This Article | Source: GoldSeek.com

comments powered by Disqus
1080-81, Ugger Sen Street,”Somani Bhawan”
Sita Ram Bazar, New Delhi-110006. India.
Ph: [O] 91-11-30919880 [M] 09811139549
Website: www.insigniaindia.com
Email: chintan@insigniaindia.com

Previous Articles by Chintan Karnani, Insignia Consultants

© 1995 - 2019

Live GoldSeek Visitor Map | Disclaimer