Base Metals

· Copper rose to its highest in almost four months in London as imports of the metal into China, the world's largest user, advanced to the most since April. Aluminium and zinc also climbed. MCX Copper Feb traded above Rs. 316 per kg, Zinc Feb traded near Rs. 94 per kg, Lead Feb traded near Rs. 120 per kg and Nickel Feb traded at Rs. 1094 per kg.

· Chinese imports of copper gained to 239,500 metric tons in January, 6.6 percent more than the 224,600 tons in December, the Beijing-based customs office said today.

· Gains accelerated after the LME reported copper stockpiles declined to a four-month low. They dropped 6,275 tons, or 4.2 percent, to 144,375 tons, the biggest drop since Oct. 17.

· Inventories including those monitored by the Shanghai Futures Exchange and the Comex division of the New York Mercantile Exchange, totaled 188,244 tons, the lowest since Oct. 31, 2006. That's equal to 3.7 days of global consumption, based on estimated usage of 18.74 million tons. The average was 4.9 days last year.

· China, the world's largest producer and consumer of aluminum, said that January exports of the metal fell 6.6 percent from December. It was the first monthly drop since October, according to Bloomberg data.

· Aluminum has gained 18 percent this year after power shortages in China and South Africa. The contract for delivery in three months rose $27 to $2,847 a ton on the LME.

· Zinc had a supply shortfall of 15,000 tons last year, compared with consumption of 11.41 million tons, the Lisbon-based International Lead and Zinc Study Group said today on its Web site. Lead's shortfall was 70,000 tons, compared with demand of 8.22 million tons, the group said.

· Yunnan Chihong Zinc and Germanium Co., China's fifth-largest zinc producer by capacity, cut its capacity utilization rate because of power shortages, according to Beijing Antaike Information Development Co. Chihong can produce as much as 180,000 tons of zinc a year, according to Antaike.

Copper Feb

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 moving average. The downside closing price reversal on the daily chart is somewhat negative.

Recommendations:

MCX Copper Feb: Sell at 316-317 for the target of 310 and 305 with stop loss at 319.90

MCX Zinc Feb

Technical Outlook:

Momentum studies are still 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 Zinc Feb: Sell at 94 for the target of 90.50 and 89 with stop loss at 94.80

MCX Nickel Feb

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 moving average. The downside closing price reversal on the daily chart is somewhat negative.

Recommendations:

MCX Nickel Feb: Sell at 1110 for the target of 1080 and 1060 with stop loss at 1135

MCX Lead Feb

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 moving average. The downside closing price reversal on the daily chart is somewhat negative.

Recommendations:

MCX Lead Feb: Buy at 117.50 for the target of 121 and 123 with stop loss at 116.20

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