Energy

Crude oil fell from a one-week high in New York and MCX on speculation that an economic slowdown in the U.S. will spread to oil-consuming countries throughout the world. Oil continued lower below the 90 usd mark, tracking stock markets south as a slowing economic outlook continues to weigh on projections for crude demand.

· MCX Crude Oil registered days low at Rs. 3499 per barrel and was trading with major loss. Market registered days high at Rs. 3554 per barrel.

· Some OPEC members, including Iran's Governor Hossein Kazempour Ardebili, have said the group is unlikely to raise output because there are sufficient supplies in the market and signs of a global economic slowdown mean demand may fall.

· U.S. economic growth probably slowed to 1.2 percent in the fourth quarter as high fuel costs and rising unemployment limited consumer spending, according to a survey of economists. Asian stocks fell for the first time in four days after Goldman Sachs Group Inc. said the Japanese economy has probably fallen into a recession.

· Natural gas on Multi Commodity Exchange (MCX) retreated from intraday high but has continued to trade positive Monday extending the 3.6 percent rise noted in previous two trading sessions following it settled on Friday at the highest price since Jan 19.

· MCX gas edged up for a third day today tracking the sharp gains on international exchange on Friday. The gains were however kept in a check as Nymex gas slipped to the red zone in the electronic trade session today.

· While temperatures are expected to be warm earlier this week, forecasts released Friday called for colder weather during the 6-to 10-day period in the U.S. Northeast and Midwest which could give a boost to heating demand. According to forecast by AccuWeather.com, as reported by Dow Jones newswires, temperatures are expected to drop into the single digits in New York this weekend and remain in the teens and 20s Fahrenheit during the first week of February.

MCX Crude Oil 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 overbought level, which is bearish and should support lower prices. The market's short-term trend is negative as the close remains below the 9-day moving average. The upside closing price reversal on the daily chart is somewhat positive.

Recommendations:

MCX Crude Oil Feb: Buy at 3520-3510 for the target of 3595 and 3645 with stop loss at 3480

MCX Natural gas 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 overbought level, which is bearish and should support lower prices. The market's short-term trend is negative as the close remains below the 9-day moving average. The upside closing price reversal on the daily chart is somewhat positive.

Recommendations:

MCX Natural Gas Feb: Buy at 306 for the target of 321 and 332 with stop loss at 297

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