energy

MCX crude moved further ahead today moving in line with the upturn movement on international exchange. Also rupee shed some of the early gains noted against the US dollar.

Nymex crude has weakened in last few days on concerns that fall out from US subprime market crisis to larger economy will affect economic growth and thereby oil demand. Meanwhile, in a bid to ease global credit concerns, that is threatening slowdown in global economy, many central banks this week injected funds in the market.

Global oil demand has been supported by robust growth in developing nations like China and India. China is the second biggest oil consumer coming after the US. In a bid to prevent economic overheating and broad based inflation, China said today that it will raise benchmark one year deposit and lending rates for the sixth time this year.

Weekly Inventory

The U.S. Department of Energy said that underground supplies of natural gas were down 121 billion cubic feet last week to 3.173 trillion cubic feet. Supplies are now down slightly from a year ago and up 9% from the five-year average. February natural gas is steady.

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 3590-80 for target of 3660 and 3715 with stop loss below 3535

MCX Natural gas 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 Natural Gas Jan: buy at 285-286 for the target of 289.1 and 293 with stop loss at 282

MCXARUN