energy intraday

Energy
20 May 2008 11:37:42



Major Headlines:



Oil stayed close to record highs as OPEC looked increasingly unlikely to raise production despite peak prices, and on expectations of higher demand from China. And also the oil price has managed to hold near $125/bbl despite concerns about economic weakness and expectation for a stronger U.S. dollar



Goldman Sachs, the most active investment bank in energy markets, has predicted crude will jump to $141 in the second half of the year.



Looking ahead, all eyes will remain on the dollar for short-term direction, a weekly U.S. energy inventory report due Wednesday and market players will track imports into China after last week's disaster. Also, participants will keep an eye on U.S. gasoline stocks ahead of the driving season, which kicks off late May, to see whether the credit crunch has had a severe impact on demand



Saudi Arabia's oil minister, Ali al-Nuaimi, said Friday the kingdom had increased oil production by 300,000 barrels per day from May 10 in response to orders from customers, mostly from the United States, and will pump 9.45 million barrels per day in June.



But Nuaimi reiterated OPEC's long-standing view that global oil supply was balanced with demand and that market fundamentals were sound. Saudi Arabia is the biggest producer in the 13-nation OPEC, which pumps 40 percent of the world's oil. Iran, another major producer, said on Saturday that any output hike by OPEC as requested by the United States would not affect prices.



MCX Crude Oil June (Daily Chart)






Technical Outlook:The daily stochastic have crossed over up which is a bullish indication. The stochastic 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 EMA. The downside closing price reversal on the daily chart is somewhat negative




Market is expected to remain positive and the resistance is seen at 5378 levels. If market breaches 5378 may see prices to take further upside towards 5427 and 5460 however if it holds back below 5296 may see prices to fall further on today. Major support is seen at 5263 and 5214



Recommendations-MCX Crude Oil June: Buy at 5260 Target 5310 and 5370 Stop loss 5215

MCX Natural gas May (Daily Chart)






Technical Outlook:The daily stochastic have crossed over down which is a bearish indication. The stochastic 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 EMA. The upside closing price reversal on the daily chart is somewhat positive.

Market is expected to remain positive and the resistance is seen at 477.70 levels. If market breaches477.70 may see prices to take further upside towards 481.90 and 484.60 however if it holds back below 470.80 may see prices to fall further on today. Major support is seen at 468.10and463.90

Recommendations-MCX Natural Gas June: Buy at 469 Target 474 and 480 Stop loss at 466

MCXARUN
9994500540

bullion intraday

Bullion
20 May 2008 11:44:01



Major Headlines:

Spot gold climbed as high as$914.40 an ounce in New York Monday morning, its highest intraday level since April 22. The dollar remains a currency facing substantial headwinds in the form of the huge annual trade, current and now increasing budget deficits and burgeoning stagflation



Gold extended gains to hit its highest level in nearly a month above $900 an ounce on the back of speculative buying as oil held near record high, raising fears of inflation.



Previous attempts to revisit the record high have been met by heavy profit taking, which saw gold fall to a four-month low at $845 an ounce in early May. Whether gold will hold above $900 is a difficult question. Around about $920 should be the psychological resistance for the metal,



Gold rose to the highest in three weeks as surging energy costs boosted demand for the precious metal as a hedge against inflation. Silver dropped. Crude-oil futures approached the record high from May 16 before erasing gains. The surge in oil spurred a 3.3 percent gain in the Reuters/Jefferies CRB Index of 19 commodities this month. Gold is still down 13 percent from $1,033.90 an ounce, the highest ever, on March 17, when oil reached a previous peak



Platinum supplies will fall short of consumption for a second year in 2008 as increased demand from automakers, the biggest user, outpaces mine output from South Africa, the largest producer



Last year's deficit was 480,000 ounces, the largest since 2002, as auto use gained 8.2 percent and global supply fell to the lowest in three years, The metal rose to a record $2,301.50 an ounce in March and may trade at $1,775 to $2,500 in six months with a ``substantial deficit'' for the year



It might be a surprise that platinum jewelry demand held up as well as it did, China, which accounts for 49 percent of platinum jewelry demand, used 2.6 percent more, and gains in the U.K. and Switzerland spurred a 7.7 percent increase in Europe and the Platinum has gained 42 percent this year, outpacing gold's 8.8 percent advance and silver's 16 percent increase.


Supplies of silver will exceed demand from jewelers and other manufacturers by 2,691 metric tons, the highest in more than 20 years, Including investor demand and reduced sales of hedged production by miners, the surplus will be 541 tons compared with a deficit of 1,345 tons last year



Sino Gold Mining Ltd., owner of China's second-largest gold mine, said operations at the Jinfeng mine weren't affected by last week's earthquake in neighboring Sichuan province that killed more than 30,000 people. Sino Gold started output from Jinfeng in southern Guizhou province last year and has forecast output of as much as 160,000 ounces this year.



U.S.Economy:

The Conference Board's index of leading indicators was up .1% in April, a little better than expected. Six of the ten indicators showed positive gains

U.S. food prices may jump 5.5 percent this year, more than a previous forecast of 5 percent, according to the U.S. Department of Agriculture. Fats and oils may increase 11.5 percent, egg prices may climb 11 percent, and baked products could rise 8.5 percent

Currencies update:

The ECB has refrained from following the U.S. Federal Reserve and Bank of England in lowering interest rates to shore up growth after a global increase in borrowing costs dimmed the outlook. The bank says Europe's economy is sound and inflation remains a bigger concern. While euro-region inflation slowed to 3.3 percent in April from a 16-year high of 3.6 percent in March, it's still above the ECB's 2 percent limit.

Construction output in the Euro area 15 was down 2.2% in March and down 1.4% from a year ago.

INR trading is closed yesterday due to bank Holiday

MCX Gold June (Daily Chart)








Technical Outlook:The daily stochastic have crossed over up which is a bullish indication. The stochastic 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 EMA. The downside closing price reversal on the daily chart is somewhat negative.



Market is expected to remain positive and the resistance is seen at 12196 levels. If market breaches 12196 may see prices to take further upside towards 12362 and 12569however if it holds back below 11823 may see prices to fall further on today. Major support is seen at 11616 and 11450



Recommendations–MCX Gold June: Buy at 12265 Target 12335 and 12410 Stoploss at 12220

MCX Silver July (Daily Chart)







Technical Outlook: The daily stochastic have crossed over up which is a bullish indication. The stochastic 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 EMA. The downside closing price reversal on the daily chart is somewhat negative.



Market is expected to remain positive and the resistance is seen at 23482 levels. If market breaches23482 may see prices to take further upside towards 23843 and 24167however if it holds back below 22797 may see prices to fall further on today. Major support is seen at 22473 and 22112



Recommendations-MCX Silver July: Buy at 23360 Target 23490 and 23650 Stop loss at 23240


MCXARUN
9994500540

longview calls

GOLD
LIKELY TO TEST 12600-700-800 WITH ANY BREAK & CLOSE ABOVE 12475, ONLY CLOSE BELOW 11725 SOME DOWN SIDE AGAIN(JUNE)


NAT GAS
LIKELY TO TEST 512-15/520 WITH ANY BREAK & CLOSE ABOVE 499, ONLY CLOSE BELOW 431 DOWN RALLY AGAIN(JUNE)


NICKEL
LIKELY TO TEST 1075-60 WITH ANY BREAK & CLOSE BELOW 1100, WHILE CLOSE ABOVE 1150 SOME UPSIDE AGAIN(MAY)


MCXARUN
9994500540

safe trade calls

GOLD

for the day buy abv 12425 & more abv 12475 S/L 12405 and T/p 12525-550 upto 12600 OR sell below 12240 S/L 12255 and T/p 12200 upto 12150 where good support seen again. close above 12475 test 12600/12800 in coming days (any time close above 12475/13100/ 13425 bullish while close below 11725/ 11460/11150/11000-10925 bearish for medium term)


SILVER

for the day buy abv 23725 S/L 23650 and T/p 23800-850/sustain abv test 24000-24100 atleast/towards 24250 OR buy ard 23175-80 S/L 23150 and T/p 23250-23350 (any time close below 22750-300/21575-500/ 20400/19250/ 18775 bearish rally while close above 23850/24500/26300/27700 bullish for medium term)


CRUDE

for the day buy only abv 5395-5400 S/L 5380 and T/p 5430-50 upto 5480 OR sell only below 5290 S/L 5310 and T/p 5260-65/ 5200 upto 5160, anytime close below 5120 bearish test 4980-5000 atleast/towards 4925 in coming days (now crude need to close above 5390 for bullish rally while close below 5120/ 5050/4740/4450 bearish for medium term)


COPPER

book profit on buy abv 346.5-347/351, for the day buy abv 355.5 S/L 354 and T/p 356.5/358/361-361.5/close above test 372-375 atleast in coming days OR buy ard 343-343.5 S/L 342.5 and T/p 345-47, as long support of 341 uptrend likely to continue (upside strong rally only on close above 361.5 while close below 340.5/336/330-326.5/310 bearish for medium term)


MCXARUN
9994500540

comex gold intraday

Gold Outlook
20 May 2008 10:34:07



Gold price closed higher yesterday, extending Friday’s gains, despite the dollar managing to strengthen moderately. The bullion’s appeal as an inflation hedge was boosted by high oil prices.



International spot gold traded in the range $900.55 - $913.35 and last quoted at $903.95 ($901.30).



The dollar found support in the index of leading economic indicators that showed a rise for the second straight month in April. The index rose 0.1% in April, identical to the gain in March after falling for the five prior months.



But on Friday, a more-than-expected fall in US consumer sentiments had renewed concerns about the economy. The University of Michigan’s Consumer Sentiment Index in May fell to 59.5 from 62.6 in April against the expectation for 61.0.



According to the data released by US Labor Department on Thursday, the number of people filing for the first time for unemployment benefits rose 6,000 to a seasonally adjusted 371,000 in the week ended May 10. But the four-week average of initial claims fell 1,000 to 365,750.



The continuing claims also recorded an increase, by 28,000 to 3.06 million in the week ended May 3; while the four-week average of continuing claims increased by 15,250 to 3.02 million.



The data from US Labor Department released on Wednesday showed that inflation had moderated in April, with the Consumer Price Index recording a rise of 0.2%.



Mean while, stronger-than-expected GDP data from the euro-zone provided support for the Euro. The European Union's statistical agency Eurostat reported that gross domestic product across the 15-nation euro-zone expanded at a 0.7% quarterly pace in the first three months of the year, gaining 2.2% year-on-year.



Federal Reserve Chairman Ben Bernanke in a speech last week had said that the US central bank's efforts to provide liquidity to financial markets in an effort to alleviate the credit crunch had helped but that markets remain stressed.



As per data released on last Tuesday, US retail sales fell by a seasonally adjusted 0.2% in April, following a 0.2% gain in the previous month. But it was slightly stronger compared to the expectation for a 0.3% drop.



But renewed credit market concerns still weigh on the greenback. American International Group, the world's biggest insurer had posted its largest ever quarterly loss. The result dimmed the optimism about the recovery in the economy despite data showing the U.S. trade deficit narrowed in March.



Crude oil June in NYMEX traded as high as $127.77 a barrel and settled at $127.30, $1.01 higher.



Oil prices thrived on potential supply threats due to geo-political tensions, expected demand from China and OPEC’s unwillingness to increase output despite high oil prices.



Last day DGCX Gold June traded in the range $901.50 – $914.50 and closed at $906.50 ($903.30).





TECHNICAL OUTLOOK (Intra-day)

GOLD (June) - Bullish above $ 910.00; bearish below $ 904.50


MCXARUN
9994500540

basemetals intraday

Base Metals
20 May 2008 09:24:05



Major Economic Data:

The Conference Board's index of leading indicators was up .1% in April, a little better than expected. Six of the ten indicators showed positive gains.

Construction output in the Euro area 15 was down 2.2% in March and down 1.4% from a year ago.

Copper

Copper fell the most in a week as inventories monitored by the London Metal Exchange climbed to the highest in two months.

Stockpiles rose 1,500 metric tons, or 1.2 percent, to 122,725 tons, the highest since March 19. Including supplies tallied by exchanges inNew York andShanghai, inventories were 183,901 tons, or 3.6 days of global consumption.

Reconstruction of homes, schools, bridges and roads afterChina's most powerful earthquake in more than half a century may have a limited impact on the country's overall demand for metals, analysts and a company executive said.

Contract workers at Codelco, the world's biggest copper producer, showed up for their jobs today under a threat of renewed protests over bonus payments.

MCX Copper June - Technical Outlook:

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

Market is expected to remain negative and the support is seen at 347.6 If market breaches below 347.6 may see prices to take further correction towards 344.6 and 340.7; However if it holds back above 354.4 may see prices to rise further on today. Major resistance is seen at 358.3 and 361.3

Recommendations-MCX Copper June: Sell at 351 Target 346 and 344 Stop loss 353.20



Nickel

MCX Nickel June dropped towards 1107 and settled with loss following LME and Copper.

The surplus of nickel shrank to the least in a year in March after production fell for two straight months, data from the International Nickel Study Group showed.

World output beat demand by 1,700 metric tons in March, the smallest amount since February 2007, when there was a deficit of 4,000 tons, the Lisbon-based group said in a May 16 report.

Production dropped 1 percent to 117,500 tons in March, the lowest since November and down 4.9 percent from a year ago, it said. Consumption was 115,800 tons, the highest in a year.

Thirteen straight monthly surpluses have pushed prices down 48 percent in the past year. Outokumpu Oyj, the fourth-largest stainless-steel maker, posted a 79 percent drop in quarterly profit last month on losses linked to nickel inventories.

Nickel warehouse stock at LME, net change was –144 MT to 49494 MT

MCX Nickel May -Technical Outlook:

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 EMA. The upside closing price reversal on the daily chart is somewhat positive.

Market is expected to remain negative and the support is seen at 1107.0 If market breaches below 1107.0 may see prices to take further correction towards 1100.5 and 1094.0; However if it holds back above 1120.0 may see prices to rise further on today. Major resistance is seen at 1126.5 and 1133.0

Recommendations:MCX Nickel May: Sell at 1115 Target 1103 and 1085 Stop loss 1124



Zinc

Zinc fell the most in eight weeks on inLondon, dropping from the biggest weekly gain in almost six months as analysts said the Chinese earthquake that may have claimed 72,000 lives will have a limited effect on production.

About 300,000 metric tons of smelting capacity was affected by the May 12 tremor centered in Sichuan, Macquarie Group Ltd. said in a report today. The figure is less than 1 percent of theChina's annual output, according to the Sydney-based company.The country is the world's largest producer of the metal.

Zinc warehouse stock at LME, net change was 5075 MT to 128575 MT

MCX Zinc May -Technical Outlook:

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

Market is expected to remain negative and the support is seen at 94.8 If market breaches below 94.8 may see prices to take further correction towards 93.5 and 91.3; However if it holds back above 98.2 may see prices to rise further on today. Major resistance is seen at 100.4 and 101.7

Recommendations-MCX Zinc May:Sell at 97 Target 95 and 93 Stop loss 98.10



Lead

MCX Lead dropped almost by 4% following other metals and LME trend. Market took correction from recent high of 99.90 on Friday.

Lead warehouse stock at LME, net change was 1150 MT to 64350 MT

MCX Lead May -Technical outlook:

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 EMA. The upside closing price reversal on the daily chart is somewhat positive.

Market is expected to remain negative and the support is seen at 94.8 If market breaches below 94.8 may see prices to take further correction towards 93.5 and 91.4; However if it holds back above 98.2 may see prices to rise further on today. Major resistance is seen at 100.3 and 101.6

Recommendations –MCX Lead May: Sell at 96 Target 94 and 92 Stop loss at 97.20



Aluminium

MCX Aluminium dropped almost by 1.70% following LME heavy Inventory, while other base metals also supported the move.

Aluminium warehouse stock at LME, net change was 10425 MT to 1039550 MT

MCX Aluminium May -Technical outlook:

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

Market is expected to remain positive and the resistance is seen at 126.7 levels. If market breaches 126.7 may see prices to take further upside towards 127.5 and 128.1;however if it holds back below 125.4 may see prices to fall further on today. Major support is seen at 124.8 and 124.0

Recommendations–MCX Aluminium May: Sell at 126 Target 124 and 122 Stop loss at 127.20

MCXARUN
9994500540

GENERAL MARKET CONDITIONS

US senators are now trying to bail out the US consumer drenched in housing woes. Leaders of the U.S. Senate Banking Committee had reached a deal on legislation to create a multibillion-dollar mortgage rescue fund and a new regulator for housing finance companies Fannie Mae and Freddie Mac. The plan would enable the Federal Housing Administration to guarantee billions of dollars in refinanced mortgages for homeowners whose properties have fallen in value since they took out their loans. The rescue plan would give a federal guarantee to failing mortgages once the lender erased at least 15 percent of the original loan amount, an offer that might appeal to mortgage investors who have seen foreclosures spike and home values sink over the past 12 months. This move is just a cover up of past failed measures. It remains to be seen whether it reaches the needy or fund managers stifle away with the funds, just like we have in India on most government sponsored schemes. Short term gains for the US economy and long term pains as it will create yet another bubble over the coming years.

Silver has disappointed. I am more of a silver bull than a gold bull and silver’s under performance will prevent volumes from picking up. But do not write off silver as it is a sleeping dragon. Silver rises very swiftly and also falls very swiftly. The year to date (YTD) return on silver is 14.99% as compared to 9.19% in gold. Silver is a great long term investment but volatility will rise as it gets caught between base metals and precious metals. Long term silver is still a better bet than gold and is a great investment on any five to ten percent dips from the current prices.

Nickel has disappointed among the base metals. There are more long positions than short in Nickel. LME Nickel (3 months) has to hold $25006 in the short term to prevent a fall to $23211 and below. Technically it is highly oversold. Short term the fundamental picture is still negative for nickel as demand remains week.

NYMEX CRUDE OIL

Crude oil has to hold $122.90 on closing basis to be in bullish zone else a fall back to $119.60 and $116.20. Resistance at $128.30 and $130.90.

MCXARUN
9994500540