Base Metals

Copper rose in Shanghai as investors deemed a decline yesterday excessive amid signs of steady demand in China, the world's largest consumer of the metal.

Spot copper prices in Changjiang, Shanghai's biggest cash market, have held above 56,000 yuan ($7,590) a metric ton since Nov. 23 even as copper futures fell 3.6 percent in the same period.

Aluminum gained in London on speculation falling exports from China will lead to a faster decline in stockpiles. Lead gained on a report that production was halted in an area of China because of a change in taxes.

Aluminum inventories monitored by the London Metal Exchange slid 2,500 metric tons to 926,050 tons, the biggest drop since Nov. 6 and the lowest since Nov. 30. Net exports from China, the world's biggest producer and consumer, fell this year after the government raised export taxes.

Nickel gained on speculation stainless-steel makers, the biggest users, may rebuild their depleted inventories after prices dropped by half since May. The contract added $395, or 1.5 percent, to $26,295 a ton.

ArcelorMittal Chief Executive Officer Lakshmi Mittal said last month that producers of stainless steel were using their own inventories, or ``destocking'' after nickel prices plunged. Nickel stockpiles monitored by the London Metal Exchange have climbed for the past seven months.

MCX Copper Feb (Daily Chart)

Technical Outlook:

Momentum studies are bearish but are now at oversold levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over down which is a bearish indication. The stochastics indicators are decreasing from over bought level, which is bearish and should support lower prices. The market's short-term trend is negative as the close remains below the 18-day moving average. The upside closing price reversal on the daily chart is somewhat positive.

Recommendations:

MCX Copper Feb: Buy at 259-258 for the target of 264 and 267.50 with stop loss at 254.50

MCX Zinc Dec (Daily Chart)

Technical Outlook:

Momentum studies are bearish but are now at oversold levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over up which is a bullish indication. The stochastics indicators are increasing from over sold level, which is bullish and should support higher prices. The market's short-term trend is negative as the close remains below the 18-day moving average. The upside closing price reversal on the daily chart is somewhat positive.

Recommendations:

MCX Zinc Dec: Sell at 91.90-92.30 for the target of 90.10 and 89.10 with stop loss at 93.20

MCX Nickel Dec (Daily Chart)

Technical Outlook:

Momentum studies are bearish but are now at oversold levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over up which is a bullish indication. The stochastics indicators are rising from oversold level, which is bullish and should support higher prices. The market's short-term trend is negative as the close remains below the 18-day moving average. The upside closing price reversal on the daily chart is somewhat positive.

Recommendations:
mcx nickel dec: buy @ 1041-45 for the target of 1059 and 1070 with stoploss @1029

MCX Lead Dec (Daily Chart)

Technical Outlook:

Momentum studies are bearish but are now at oversold levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over down which is a bearish indication. The stochastics indicators are on hold from over sold level, which is bullish and should support higher prices. The market's short-term trend is negative as the close remains below the 18-day moving average. The upside closing price reversal on the daily chart is somewhat positive.

Recommendations:

MCX Lead Dec: Buy at 99.20-98.80 for the target of 101.40 and 102.5 with stop loss at 98.60