Base Metals

Base metals traded lukewarm on Multi Commodity Exchange [MCX] due to lack of international cues. The benchmark London Metal Exchange [LME] is closed on 24th, 25th and 26th for Christmas holiday.

Elsewhere, on Shanghai Futures Exchange [SHFE] copper futures hit its daily limit up for the third consecutive day in a row. Copper in Shanghai rose by the exchange-imposed daily limit for a second day as stockpiles in China slumped to a 10-month low, signaling that the world's biggest consumer of the metal may need to step up buying.

Copper dropped almost 14 percent in the past three months, pressured by a housing slump in the U.S., the world's second-biggest consumer. China's imports this year have helped to underpin the price of the metal, used in wires and pipes.

China's refined copper imports gained 56 percent to 103,410 tons in November 2007, compared with a year earlier, the Beijing- based customs office said on Monday. Imports of the metal rose 89 percent to 1.4 million tons in the 11 months to Nov. 30, the customs office said on Monday, citing revised final data.

Overseas purchases are expected to increase further in the next few months as the profit on imported copper has risen by as much as 3,500 yuan a ton so far this month.

Hindustan Zinc, India's leading zinc producer raised the prices of its Zinc products by INR1,000 to INR1,04,600/tonne.


MCX Copper Feb (Daily Chart)



Technical Outlook:

Momentum studies have turned bullish; 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 increasing from over sold level, which is bullish and should support higher prices. The market's short-term trend is positive as the close remains above the 18-day EMA. The downside closing price reversal on the daily chart is somewhat positive.

Recommendations:

MCX Copper Feb: Buy at 274-275 for the target of 282 and 284 with stop loss at 270.50



MCX Zinc Dec (Daily Chart)

Technical Outlook:

Momentum studies have turned bullish; 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 increasing from over sold level, which is bullish and should support higher prices. The market's short-term trend is positive as the close remains above the 18-day EMA. The downside closing price reversal on the daily chart is somewhat positive.

Recommendations:

MCX Zinc Dec: Buy at 96.00-95.50 for the target of 97.50 and 98.80 with stop loss at 94.80



MCX Nickel Dec (Daily Chart)



Technical Outlook:

Momentum studies have turned bullish; 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 increasing from over sold level, which is bullish and should support higher prices. The market's short-term trend is positive as the close remains above the 18-day EMA. The downside closing price reversal on the daily chart is somewhat positive.

Recommendations:

MCX Nickel Dec: Buy at 1060-1055 for the target of 1075 and 1090 with stop loss 1045

MCX Lead Dec (Daily Chart)



Technical Outlook:

Momentum studies have turned bullish; 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 increasing from over sold level, which is bullish and should support higher prices. The market's short-term trend is positive as the close remains above the 18-day EMA. The downside closing price reversal on the daily chart is somewhat positive.

Recommendations:

MCX Lead Dec: Buy at 106 –105.50 for the target of 108 and 109.80 with stop loss at 104.40

Energy

On MCX, crude oil contract for Jan. delivery has been trading at Rs.3, 640-Rs. 3680 Range per barrel (NYMEX crude oil $92.50 – $93.80per barrel) with a decline. Trading on New York Mercantile Exchange closed early on Monday today and will fully closed on Tuesday Christmas holiday.

Crude oil on MCX noted jerky trade but held mostly in the red zone on Monday after registering a 4.1% leap in previous four trading sessions following which it closed on Saturday at highest price since Nov.27.

Nymex crude noted mixed trade amid mild trade volumes in the electronic trade session today after registering a over $2 rise on Friday following which it settled at the highest price since Dec.12. Thin trade volumes exacerbate price movements.

Seasonal temperatures are likely to cover the eastern half of the U.S. starting Dec. 23 and remain through Dec. 27, when above-normal temperatures will develop, MDA Federal Inc.'s EarthSat Energy Weather said in a 10-day outlook on Dec. 21.

Daily deliveries of crude oil from the Organization of Petroleum Exporting Countries, responsible for 40 percent of world supplies, will decline 0.4 percent to 24.33 million barrels a day in the four weeks to Jan. 5, the first decline in OPEC shipments since August, consultant Oil Movements predicted.

MCX Crude Oil Jan (Daily Chart)



Technical Outlook:

Momentum studies are turning bearish but not at oversold 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 3655-3660 for target of 3730 and 3765 with stop loss below 3620

MCX Natural gas Jan (Daily Chart)



Technical Outlook:

Momentum studies are turning bearish but not at oversold 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 280-85 for the target of 315 and 325 with stop loss at 270

Bullion

MCX Gold was little changed with very low volume on shortened trading hours in Europe and in the U.S. before the Christmas holiday. The other precious metals were similarly quiet and held recent ranges to end the year on a positive note.

Hedge fund managers and other large speculators cut their net-long position in New York gold futures by 1 percent in the week ended Dec. 18, according to U.S. Commodity Futures Trading Commission Data.

The dollar dropped against the euro on Monday and was down as much as 0.3 percent against a basket of six major currencies. Five of the six past bear markets in the dollar have sent gold higher.

MCX Gold Feb (Daily Chart)

Technical Outlook:

Momentum studies have turned bullish; 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 increasing from over sold level, which is bullish and should support higher prices. The market's short-term trend is positive as the close remains above the 18-day EMA. The downside closing price reversal on the daily chart is somewhat positive.

Recommendations:

MCX Gold Feb: Buy at 10360-70 for the target f 10430 and 10500 with stop loss at 10315

MCX Silver Mar (Daily Chart)

Technical Outlook:

Momentum studies have turned bullish; 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 increasing from over sold level, which is bullish and should support higher prices. The market's short-term trend is positive as the close remains above the 18-day EMA. The downside closing price reversal on the daily chart is somewhat positive.

Recommendations:

MCX Silver March: Buy at 19200-180 for the target o 19350 and 19560 with stop loss at 19050

HAPPY XMAS

Merry Christmas to all customers

LONG VIEW

CRUDE OIL
LIKELY TO TEST 3460-35 UPTO 3410 WITH ANY CLOSE BELOW 3500 WHILE CLOSE ABOVE 3715/3875-3900 UPTREND AGAIN(JAN)

NATGAS
LIKELY TO TEST 275-72 UPTO 267 WITH ANY BREAK & CLOSE BELOW 282-280, ONLY CLOSE ABOVE 302 SOME UPSIDE AGAIN
(JAN)
MCXARUN
9994500540

outlook

February gold closed higher on Friday and above the 20-day moving average crossing at 807.40. The high-range close sets the
stage for a steady to higher opening on Monday. Stochastics and the RSI are neutral to bullish signaling that sideways to higher
prices are possible near-term. Closes above last Wednesday's high crossing at 822.80 are needed to renew the rally off
November's low. From a broad perspective, February gold needs to close above 855.00 or below 780.40 to confirm a breakout
of the late-fall trading range and point the direction of the next trending move. First resistance is today's high crossing at 816.70
then last Wednesday's high crossing at 822.80. First support is Monday's low crossing at 789.60 then the reaction low crossing
at 783.00.


March silver closed higher on Friday and as it extended this week's rally and closed above the 20-day moving average crossing
at 14.453. The high-range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI have turned
bullish signaling that sideways to higher prices are possible near-term. Today's close above the 20-day moving average
confirms that a short-term low has been posted. If March extends this week's rally, this month's high crossing at 14.975 is the
next upside target. First resistance is today's high crossing at 14.580 then the reaction high crossing at 14.975. First support is
Monday's low crossing at 13.740 then October's low crossing at 13.360.

February crude oil closed sharply higher on Friday as it rebounded off the 25% retracement level of the August-November rally
crossing at 90.65. The high-range close sets the stage for a steady opening on Friday. Stochastics and the RSI remain neutral to
bullish signaling that sideways to higher prices are possible near-term. If February renews last week's rally, the reaction high
crossing at .9660 is the next upside target. Closes below Tuesday's low crossing at 89.15 would temper the near-term friendly
outlook in the market. A close below the reaction low crossing at .8560 would renew the decline off November's high. First
resistance is today's high crossing at 93.84. Second resistance is last Wednesday's high crossing at 94.72. First support is
Tuesday's low crossing at 89.15 then the 38% retracement level of this year's rally crossing at 86.67.

February Henry natural gas closed higher on Friday and above the 10-day moving average crossing at 7.260. The high-range
close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI are bullish signaling that sideways to
higher prices are possible near-term. Closes above the 20-day moving average crossing at 7.373 are needed to confirm that a
short-term low has been posted. If February renews the decline off November's high, weekly support crossing at 6.801 is the
next downside target. First resistance is Thursday's high crossing at 7.352 then the 20-day moving average crossing at 7.373.
First support is Monday's low crossing at 7.045 then weekly support crossing at 6.801.

MCXARUN
9994500540

GENERAL MARKET CONDITIONS

Last Friday we had mentioned that traders will either square off or go long in precious metals and energies, we were right. Volumes this week will fall and trading will be volatile. Window dressing by fund managers along with position building for the first quarter of 2008, particularly in the options markets will dictate the markets. There is nothing new to comment and it will be technical trade for the rest of the week.

Crude oil floating over $90 a barrel as the year comes to a close. Crude oil has given the best return in 2007, which will draw more and more investor going long in crude oil. I am skeptical about rise in crude oil prices after August 2008. The reason, 2008 is US elections year and higher energy prices will become a political issue which could result in speculators cutting some of the longs in crude oil ahead of the US elections. Unless there are major hurricanes in the Gulf of Mexico in 2008, we remain bearish on crude oil before US presidential elections. I did rather take a chance and buy some puts between July and November 2008.

Emerging market stocks like India had a great and memorable 2007. This will continue into 2008. However it will not be a one way traffic like 2007. There will be some fluctuations. India stock markets and India companies will benefit from interest rates cuts from other central banks as cost of funds decline. However the sectors which performed in 2007 may be the laggards in 2008. We prefer to buy interest rate sensitive sectors like Automobiles and others (apart from infrastructure) for 2008 as lower global interest rates and lower commodity prices will benefit them. Apart from interest rate sensitive stocks, agro - commodity stocks (apart from sugar) is also a good long term investment as higher prices are here to stay.

GOLD -- FEBRURAY FUTURE -- INTRA DAY PIVOT:$723

Gold has to break $825 for gains to $848, else it will fall to $808 and $798 once again.

NYMEX CRUDE OIL -- FUTURE -- INTRA DAY PIVOT: $92.10

Crude oil needs to break $95 else it will fall to $90.50 and $88.90 once again. As long as crude oil floats over $90.50 downside will be limited.