Base Metals

Base metals fell for a second day in MCX and LME as slumping industrial production inSpain andFrance added to speculation about reduced demand for the metal used in homes and cars. Nickel dropped the most in a month.

· Copper Output at factories, utilities and mines fell 1.5 percent in November in France and declined from a year earlier in Spain for the first time since October 2005, reports today from the governments showed. Copper slid from a two-month high yesterday after Goldman Sachs Group Inc. said the U.S. is probably slipping into recession.

· Demand for refined copper in the U.S. will slide 1.5 percent this year while consumption increases 6 percent in China, the Chilean Copper Commission said yesterday in a report.

· UBS AG cut its copper price forecast for this year, citing declining consumption of industrial metals. The price will average $3 a pound in 2008, UBS analysts led by London-based John Reade said in a report today. That's almost 8 percent lower than the previous forecast of $3.25. Copper averaged $3.23 a pound in 2007.

· India's Hindustan Zinc Ltd, increased the price of its Zinc products by INR 3, 500 a metric tonne to INR1,14,100 per tonne Thursday with immediate effect. Meanwhile Lead prices were kept unchanged at INR 1, 15,600 per tonne.



MCX Copper 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 Copper Feb: Buy at 283-284 for the target of 290 and 294 with stop loss at 276.50



MCX Zinc Jan (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 Zinc Jan: Sell at 97.50-98 for the target of 95 and 93 with stop loss at 99.50



MCX Nickel Jan (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 Nickel Jan: Sell at 1140-45 for the target of 1105 and 1090 with stop loss at 1165

MCX Lead Dec (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 Lead Jan: Buy at 101 for the target of 103.15 and 104.50 with stop loss at 100.05

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