2011 - Q1 TECHNICALS
THOMSON REUTERS
REUTERS
TECHNICAL ANALYSIS
INSIDE COMMODITY TECHNICALs - Q1 2011
- Wang Tao
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Crude may correct to $83.85 in Q1
U.S. oil <CLc1> may correct to $83.85 per
barrel before resuming the rally to $96 in
the first quarter of the year, based on its
wave pattern and a channel technique.
A five-wave cycle is approaching an end,
with the wave (5) likely to peak around
an upper channel line resistance at $92.
A Fibonacci retracement on the fall from
the July 2008 high at $147.27 to Dec 2008
low at $32.40 reveals a pivotal resistance
at $89.84, the 50 percent level, which has
been tested only in this December.
Oil is expected to retrace despite
breaking above the $89.84 resistance,
as the first attempt to break the 50
percent Fibonacci retracement level quite
often fails.
A Fibonacci retracement on the five-wave
cycle indicates a possible depth of the
correction at $83.85, the 38.2 percent
level, which coincides with the lower
channel line support, upon touching
which, oil will resume its uptrend within
the rising channel towards $96.
Spot gold may range between $1,144-
$1,214/oz in Q1
Spot gold <XAU=> is expected to retrace
to range between $1,144 and $1,214 per
ounce in the first quarter of 2011, based
on its wave pattern and a Fibonacci
retracement analysis.
However, a rise above a Dec. 7 high of
$1,430.95 may violate the bearish outlook,
as the presumed wave “5” or the wave “3”
could extend to a $1,480-$1,500 range.
The rally from Oct. 2008 low at $680.80
is near an end as a five-wave cycle has
almost been completed. There are two
alternate wave counts, but both show
gold will move into a consolidation
phase.
The technical picture for
oil and gold prices looks
bearish for the first quarter,
but other commodities are
seen rising, according to
Reuters technical analyst
Wang Tao.
One wave count labels the Dec. 7 high at
$1,430.95 as a wave “5” peak, indicating
the completion of a five-wave cycle which
started at $680.80, while the other
classifies the high as a wave “3” peak,
which will be eventually surpassed by a
wave “5”.
Regardless of the exact wave pattern, a
correction is inevitable and a Fibonacci
retracement analysis based on the first
scenario reveals a target at $1,144, the
38.2 percent level.
A Fibonacci retracement based on the
second scenario indicates a shallower
level at $1,214, also the 38.2 percent level.
Multiple bearish divergences have formed
on the RSI indicator, strongly suggesting
a bearish reversal soon.
* For a Q1 technical outlook for gold:
http://graphics.thomsonreuters.com/
WT/20102812172742.jpg
* For a three-month technical outlook for
oil: http://graphics.thomsonreuters.com/
WT/20102812164405.jpg
1
2011 - Q1 TECHNICALS THOMSON REUTERS
– METALS IN Q1
LME copper may peak around
$10,000/T
LME copper <MCU3=LX> is expected to
temporarily peak around $10,000 and
retrace to $9,000 per tonne in the first
quarter, based on its wave pattern and a
Fibonacci retracement analysis.
The rise from the June low $6,037.50
adopted a five-wave mode and with the
final wave “5” of the wave (3) approaching
an end, copper would retrace to $9,000,
around the 23.6 percent Fibonacci
retracement on the rise from $6,318 to
$9,979.
It is possible for the retracement to be
limited at $9,000, as the uptrend has
been developing within a rising channel,
with the lower channel line providing a
support at $9,000. Copper may resume
the rally upon reaching this level.
The following rise would push the price up
again to $10,000.
A more bearish scenario would be if
copper retraces deeper to $8,581, the
38.2 percent level, the following move
will be confined within a price band of
$8,580-$9,100 for several weeks first
before an upward wave pushes the price
towards $10,000.
* For a Q1 technical outlook for LME
copper: http://graphics.thomsonreuters.com/
WT/20110301100829.jpg
Shanghai rebar may rise to 5,400
yuan/t
Shanghai rebar <SRBc5> is expected to
rise to 5,400 yuan per tonne over in the first
quarter on a bullish triangle pattern.
The triangle has been confirmed as the upper
trend line resistance at the 4,460 yuan has
Shanghai copper may retrace to
60,000 yuan/T
Shanghai copper <SCFc3> may retrace
to 60,000 yuan per tonne in the first
quarter as a five-wave cycle could have
completed around a strong resistance at
70,500 yuan.
However, a mild consolidation above
69,000 yuan followed by a rise over
72,000 would signal a strong bull trend
development towards 82,600 yuan.
The first attempt to break the horizontal
resistance at 70,500 yuan failed when
copper only touched a high at 69,690
yuan in November, and the current second
attempt may fail as well since the rally is
labeled as a wave “5”, the last wave of a
five-wave cycle.
An ascending trend line passing through
the December 2008 low at 22,210 yuan
and a low in June at 48,900 yuan will
provide a temporary support at 60,000
yuan for the coming correction.
* For a Q1 technical outlook for Shanghai
copper: http://graphics.thomsonreuters.com/
WT/20110301102838.jpg
been broken above, and an ascending trend
line parallel to the lower trend line of the
pattern points to 5,400 yuan.
However, a correction is due as the rally
has been exhausted as the contract
is approaching an upper channel line
resistance at 4,900 yuan. In addition, the RSI
LME aluminium may retrace to
$2,200/T
LME aluminium <MAL3=LX> is expected to
retrace to $2,200 per tonne in the first quarter,
as a downward wave “c” is yet to develop, but
a rise above $2,500 would confirm a bullish
scenario with a more explosive rally pushing
the price towards $3,000.
A fall from the April high at $2,494 has
triggered a consolidation, which could
have adopted an “A-B-C” flat mode,
meaning the three waves are roughly the
same in their lengths and the wave “B”
could have peaked in November.
The assumption of the wave pattern
will be valid so long as aluminium stays
below $2,500. There are three possible
scenarios , two of which are bearish and
one bullish. Scenario one will be if a small
wave “c” drives the price down to $2,200,
a fall below which will create a scenario
two with a bigger wave “C” driving the
price down further to $1,900.
The bias is still at the downside, as the
market sentiment may not support a bull
run if LME copper corrects
* For a Q1 technical outlook for LME
aluminium: http://graphics.thomsonreuters.
com/WT/20110301101600.jpg
indicator also shows a bearish divergence,
making it likely for a drop towards the upper
trend line of the triangle.
The correction could be limited to a
trend line support at 4,600 yuan, upon
touching which, rebar will resume the
uptrend towards 5,400 yuan.
* For a Q1 technical outlook for rebar:
http://graphics.thomsonreuters.com/
WT/20103012170115.jpg
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2011 - Q1 TECHNICALS THOMSON REUTERS
TECHNICALS - Q1 2011
– SOFTS
CBOT soybeans may rise towards
$15.55/bushel
A bull trend is firm for CBOT first-month
soybeans <Sc1> and the price is expected
to rise towards $15.55 per bushel in
the first three months of the year, as
a powerful wave “C” has only partially
unfolded.
The wave “C” is expected to travel 161.8
percent the length of the wave “A”, to
arrive eventually at a projected target
of $17.12, which may be touched within
the first quarter of 2011 if the bullish
momentum gains significantly while the
wave “5” gets extended.
A more realistic target is fixed at $15.55,
the 361.8 percent Fibonacci projection
level based on the length of the wave “I”.
It’s also the projected target indicated by
an upper trend line that passes through
the peaks of wave “1” and wave “3”.
But a moderate correction will be seen first
before soybeans surge towards $15.55,
as a strong resistance zone is observed
between $13.93-3/4 and $14.00, formed
by the 100 percent Fibonacci projection
level and the 261.8 percent Fibonacci
projection level.
The correction will end above a pivotal
support at $12.57. But a break below this
could trigger a further fall to $12.00 and
the projected target for the first quarter
would then have to be adjusted to $14.00
accordingly.
* For a Q1 technical outlook for soybeans:
http://graphics.thomsonreuters.com/
WT/20102912154914.jpg
Palm oil may rally to 4,247 ringgit/T
Malaysian palm oil <KPOc3> is poised
to rally to 4,247 ringgit per tonne in the
first quarter, as per its wave pattern and a
Fibonacci projection analysis.
A big wave (3) has extended, and is
advancing towards an eventual target at
4,247 ringgit, the 261.8 percent Fibonacci
projection level based on the length of
wave (1), since the 161.8 percent level at
3,492 ringgit has been left far behind.
However, the lower-degree wave “3” is
peaking, and a correction will start soon,
as indicated by a contracting wedge
pattern and the bearish divergence on the
RSI indicator.
A Fibonacci retracement analysis on the
rise from 2,486 ringgit to 3,792 ringgit
indicates 3,484 ringgit to be the possible
correction depth, and the uptrend should
resume towards 4,247 ringgit thereafter.
A further gain from the current level will
be limited to 3,920 ringgit.
* For a Q1 technical outlook for palm oil:
http://graphics.thomsonreuters.com/
WT/20102912143118.jpg
CBOT corn may peak at $6.63-1/2 per
bushel
CBOT corn <Cc1> is expected to form a
temporary peak around $6.63-1/2 per
bushel and retrace into a range of $5.34
and $5.83-3/4 thereafter in the first
quarter, as per its wave pattern and a
Fibonacci ratio analysis.
Corn is still riding on a wave (3), which
will travel 261.8 percent the length of the
wave (1) to arrive at $6.63-1/2, as the 161.8
percent level at $5.34 has been left far
behind.
A retracement could be seen once the
price penetrates into a range of $6.63-
1/2 and $6.53, which is the 76.4 percent
Fibonacci retracement level on the fall
from $7.65 to $2.90. This means the
correction could even start at around
$6.53.
Assuming the correction is due at $6.63-
1/2, a Fibonacci retracement reveals
depths ranging from $5.83-3/4 to $5.34,
the 23.6 percent to 38.2 percent levels.
However, it’s difficult to indicate the exact
level at which the correction will end.
Regardless of the depth of the correction,
the major trend should remain bullish,
and corn may return to the $6.63-1/2
level within the first quarter of 2011.
* For a Q1 technical outlook for CBOT corn:
http://graphics.thomsonreuters.com/
WT/20102912170305.jpg
3
2011 - Q1 TECHNICALS THOMSON REUTERS
– SOFTS IN Q1
CBOT wheat may rise to $10.33-1/4 per
bushel
CBOT wheat <Wc1> is expected to rise to
$10.33-1/4 per bushel over the first three
months of the year, as a fierce wave “C” or
wave (3) is unfolding.
The rise from the June low at $4.25-1/2 to
$8.41 adopted a standard five-wave cycle,
and the five waves make up a bigger wave
“A” or wave (1). The following wave “B”
or wave (2) correction completed at the
November low of $6.17-3/4.
The current rally is part of a wave “C” or
wave (3), capable of pushing the price up
to $10.33-1/4, the 100 percent Fibonacci
projection level.
Since the wave “C” or wave “3” is
characterized by a sharp move, the
projected target could be touched in the
first quarter of 2011. Retracement could
be shallow, limited to $7.40, which is
provided by the upper descending trend
line of a range.
* For a Q1 technical outlook for wheat:
http://graphics.thomsonreuters.com/
WT/20103012130327.jpg
NY sugar may rise to 38 cents/lb
New York sugar <SBc1> is expected to
rise to 38 cents per lb over the first three
months of the year, based on its wave
pattern and an ascending trend line.
A wave (4) correction has started at
the Dec. 29 high of 34.77 cents, and it
is expected to travel further down to
26.77 cents, the 38.2 percent Fibonacci
retracement on the rise from 13.82 cents
to 34.77 cents. A dip below 26.77 cents
may be limited to 25.30 cents, the wave
“4” trough.
A final bull run, labeled as wave (5), would
push the price up towards 38 cents, as
pointed by an ascending trend line that
passes the peaks of the wave (1) and the
wave “3”.
However, it is possible for sugar to only
reach a less aggressive target at 36 cents,
as the wave “5” failed to travel far beyond
the peak of the wave “3”, indicating the
bullish momentum has weakened.
Strategically, it is time to switch the
bullish sentiment to the bearish, as sugar
could be approaching the ultimate peak
of a bull trend that started from the May 7
low at 13 cents.
* For a Q1 technical outlook for sugar:
http://graphics.thomsonreuters.com/
WT/20103112154641.jpg
NY coffee may rise to $2.7665/lb
New York coffee <KCc2> will rise to
$2.7665 per lb over the first three months,
based on its wave pattern and a Fibonacci
ratio analysis.
Bulls have taken full control of the trend
development, and the momentum is
still strong as the current rally is labeled
as a powerful wave “3”, which will arrive
at $2.7665, the 161.8 percent Fibonacci
projection level based on the length of
the wave “1” that started from $1.7345
and ended at $2.2145.
A Fibonacci retracement on the fall from
the 1997 high at $2.77 to $0.475 reveals
that there will not be any strong resistance
before coffee climbs to $2.7665, as the
last frontier of the bears’ territory at
$2.2220, the 76.4 percent level, has been
left far behind.
A minor retracement could be seen when
coffee reaches $2.47, the 100 percent
Fibonacci projection level, but it may be
limited to $2.20.
* For a Q1 technical outlook for coffee:
http://graphics.thomsonreuters.com/
WT/20103012120702.jpg
NY cocoa may rise to $3,512/T
New York cocoa <CCc2> may return to
the January 2010 high at $3,512 per tonne
in the first quarter of this year, as the
uptrend is intact, and a rise above $3,512
may extend to $3,700.
A wave “C” is progressing, which in the
longer term may push prices towards
an eventual target at $4,028, the 161.8
percent Fibonacci projection level based
on the length of the wave “A”.
The consolidation between $2,512
and $2,580 has taken the shape of a
descending wedge, which is generally
interpreted as a bullish continuation
pattern. The upper trend line of the wedge
has been broken above, confirming the
resumption of the uptrend.
Support is fixed at $2,700, a break below
which will invalidate the bullish outlook,
and will trigger a drop to $2,300.
* For a Q1 technical outlook for cocoa:
http://graphics.thomsonreuters.com/
WT/20103012142735.jpg
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2011 - Q1 TECHNICALS THOMSON REUTERS

– SOFTS IN Q1

CME cattle may rise to 124.035 cents/lb CME lumber may rise to $364.7-$387 NY orange juice may rise to $2.095/lb

CME live cattle future <LCc1> is expected
to rise to 124.035 cents per lb over the
first three months, as a powerful wave “C”
or wave “3” is progressing.
A Fibonacci projection analysis on the
wave “C” target points to the 161.8 percent
level at 124.035 cents, which is likely to be
touched within the specified three-month
time frame because the current rally has
been classified as a sharp wave (iii).
The contract is approaching an upper
channel line resistance at 108 cents,
which will be broken with little effort soon,
based on the current wave pattern. A rise
above it will open the way to 139.40 in the
long term.
Support is at 100.50 cents, a break below
which may trigger a further drop to 94
cents and the three-month target has to
be revised to 108 cents accordingly.
* For a Q1 technical outlook for cattle:
http://graphics.thomsonreuters.com/
WT/20103012152318.jpg
CME lumber futures <LBc1> could rise
into a $364.7-$387 per thousand board
feet range over the next three months, as
a wave “C” is unfolding rapidly.
The current wave “C” is expected to travel
a minimum 100 percent the length of
the wave “A” to arrive at $364.70, or a
maximum 161.8 percent the length of the
wave “A” to touch $481.80.
If the price overshoots the $364.70 level,
it may climb up to $387, which is the 76.4
percent Fibonacci retracement on the fall
from $464 to $138.
A further gain above $387 to $400 will
confirm the move towards a $464-
$481.80 range, as the wave “C” will
then be extended to the 161.8 percent
Fibonacci projection level.
* For a Q1 technical outlook for lumber:
http://graphics.thomsonreuters.com/
WT/20103012155211.jpg
New York orange juice <OJc1> is expected
to rise to $2.095 per lb in the first three
months of the year as per its wave pattern
and an inverted head-and-shoulders
pattern.
The rally from the February 2009 low
at $0.6460 adopted a fierce five-wave
mode, with the wave “5” of wave (3) likely
to extend towards a projected target at
$2.095, the March 2007 high.
An inverted head-and-shoulders pattern
is pointing higher to $2.4780, which
could be considered only as a long-term
target and is unrealistic for a three-month
forecast, but it confirms the current bull
trend development.
Support is at $1.50, a fall below which will
temporarily violate the bullish outlook
and the contract may then consolidate
between $1.30-$1.80 range for a few
weeks first.
* For a Q1 technical outlook for orange
juice: http://graphics.thomsonreuters.com/
WT/20103012165847.jpg

** Wang Tao is a Reuters market analyst for commodities and energy technicals. The views expressed are his own.

No information in this analysis should be considered as being business, financial or legal advice. Each reader should consult
his or her own professional or other advisers for business, financial or legal advice regarding the products mentioned in the
analyses.**

(Reporting by Wang Tao; Editing by Himani Sarkar) ((wang.tao@thomsonreuters.com; +65 6870 3836; Reuters Messaging:
wang.tao.reuters.com@reuters.net)) ((If you have a query or comment on this story, send an email to news.feedback.asia@
thomsonreuters.com))

5
2011 - Q1 TECHNICALS THOMSON REUTERS
URLS:
* For a Q1 technical outlook for gold:
http://graphics.thomsonreuters.com/WT/20102812172742.jpg
* For a three-month technical outlook for oil:
http://graphics.thomsonreuters.com/WT/20102812164405.jpg
METALS
* For a Q1 technical outlook for Shanghai copper:
http://graphics.thomsonreuters.com/WT/20110301102838.jpg
* For a Q1 technical outlook for LME copper:
http://graphics.thomsonreuters.com/WT/20110301100829.jpg
* For a Q1 technical outlook for rebar:
http://graphics.thomsonreuters.com/WT/20103012170115.jpg
* For a Q1 technical outlook for LME aluminium:
http://graphics.thomsonreuters.com/WT/20110301101600.jpg
Editorial contacts:
Jonathan Leff (Global Editor, Commodities & Energy)
(Editor, Commodities & Energy, Americas)
+1-646-223-6068, jonathan.leff@thomsonreuters.com
Veronica Brown (Editor, Commodities and Energy, EMEA)
+44-20-7542-8065, veronica.brown@thomsonreuters.com
Sambit Mohanty (Editor in Charge, Commodities & Energy, Asia),
+65-6870-3084 sambit.mohanty@thomsonreuters.com
Wang Tao (Market Analyst, Singapore),
+65 6870 3836 Wang.Tao@thomsonreuters.com,
Financial Graphics, Financial.graphics@thomsonreuters.com
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SOFTS
* For a Q1 technical outlook for orange juice:
http://graphics.thomsonreuters.com/WT/20103012165847.jpg
* For a Q1 technical outlook for lumber:
http://graphics.thomsonreuters.com/WT/20103012155211.jpg
* For a Q1 technical outlook for cattle:
http://graphics.thomsonreuters.com/WT/20103012152318.jpg
* For a Q1 technical outlook for cocoa:
http://graphics.thomsonreuters.com/WT/20103012142735.jpg
* For a Q1 technical outlook for sugar:
http://graphics.thomsonreuters.com/WT/20103112154641.jpg
* For a Q1 technical outlook for coffee:
http://graphics.thomsonreuters.com/WT/20103012120702.jpg
* For a Q1 technical outlook for wheat:
http://graphics.thomsonreuters.com/WT/20103012130327.jpg
* For a Q1 technical outlook for CBOT corn:
http://graphics.thomsonreuters.com/WT/20102912170305.jpg
* For a Q1 technical outlook for palm oil:
http://graphics.thomsonreuters.com/WT/20102912143118.jpg
* For a Q1 technical outlook for soybeans:
http://graphics.thomsonreuters.com/WT/20102912154914.jpg
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