energy

MCX Crude oil Feb rose to high of Rs. 3608 per barrel and traded with reasonable gains following trend from Gold and equity market. MCX Natural gas was trading with loss of Rs.3 at Rs. 311.50

· Crude oil rose for a fourth day on speculation the U.S. Federal Reserve will cut interest rates to spur economic growth in the world's largest energy user and as OPEC prepares to keep output on hold.

· The threat of tumbling stock and home values and a weakening labor market will spur the Fed to cut its benchmark rate by half a percentage point tomorrow, traders and economists forecast. The Organization of Petroleum Exporting Countries is unlikely to change its output when it meets Feb. 1 in Vienna

· 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.

· 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 3560-3570 for the target of 3660 and 3695 with stop loss at 3520



MCX Natural gas Feb (Daily Chart)



Technical Outlook:

Momentum studies are still 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 moving average. The downside closing price reversal on the daily chart is somewhat negative.

Recommendations:

MCX Natural Gas Feb:

sell @ 313/314 stoploss 318 tgt-310-307-304

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