Energy

Nymex crude bounced back as US crude oil stocks fell for the fifth time last week and were noted at the lowest level since Feb.2005 and as reports noted that OPEC shipments may decline. However weighing on prices were forecasts of milder weather which will keep demand in a check.

Nymex crude jumped by 2.5% on Friday to settle at the highest price since Dec.12. Nymex crude bounced back as positive US consumer spending report released bolstered confidence in the economy easing concerns about oil demand. Also supporting prices was weaker dollar against the Euro, rally in gasoline futures, and a rise in US equity markets and reports that Opec shipments may fall.

MCX crude may witness thin volumes in coming week due to Christmas holiday in Global market. Thin volumes exacerbate price movements. Also traders will now square positions ahead of the year-end.

MCX Crude Oil Jan (Daily Chart)

Technical Outlook:

Momentum studies are bullish but are now at overbought 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 positive as the close remains above the 9-day and 18 days moving average. The downside closing price reversal on the daily chart is somewhat negative. Over all technical suggest a bullish market and prices are expected to go further up.

Recommendations:

MCX Crude Oil Jan: Buy at 3655-3660 for target of 3730 and 3765 with stop loss below 3620


Technical Outlook:

Momentum studies are bullish but are now at overbought 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 positive as the close remains above the 9-day and 18 days moving average. The downside closing price reversal on the daily chart is somewhat negative. Over all technical suggest a bullish market and prices are expected to go further up.

Recommendations:

MCX Natural Gas Jan: Buy at 290-285 for the target of 315 and 325 with stop loss at 270