Base metals

MCX Copper traded positive and closed at Rs. 287.35 per kg on weekend with a loss from previous closing, while Zinc, Nickel Lead, Aluminium closed in green. On London Metal Exchange, copper traded firm whereas other metals traded choppy amidst highly volatile trading conditions.

· Copper Output at factories, utilities and mines fell 1.5 percent in November inFrance and declined from a year earlier inSpain 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 theU.S. is probably slipping into recession.

· Demand for refined copper in theU.S. will slide 1.5 percent this year while consumption increases 6 percent inChina, 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.

· Sentiments across the metal complex were fragile following the hawkish statements made by the Federal Reserve chairman Ben.S.Bernanke on the state of affairs of the economy.

· The metals benefited this week from index re-balancing in international markets and is now eyeing a slew of economic data to be released next week from the US for further direction. The underlying sentiments in the metal complex continues to be dented amidst a background of a deteriorating US economy.



· MCX Copper traded positive and closed at Rs. 287.35 per kg on weekend with a loss from previous closing, while Zinc, Nickel Lead, Aluminium closed in green. On London Metal Exchange, copper traded firm whereas other metals traded choppy amidst highly volatile trading conditions.

· Copper Output at factories, utilities and mines fell 1.5 percent in November inFrance and declined from a year earlier inSpain 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 theU.S. is probably slipping into recession.

· Demand for refined copper in theU.S. will slide 1.5 percent this year while consumption increases 6 percent inChina, 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.

· Sentiments across the metal complex were fragile following the hawkish statements made by the Federal Reserve chairman Ben.S.Bernanke on the state of affairs of the economy.

· The metals benefited this week from index re-balancing in international markets and is now eyeing a slew of economic data to be released next week from the US for further direction. The underlying sentiments in the metal complex continues to be dented amidst a background of a deteriorating US economy.

LME Inventory: Following are the updates on LME warehouse stock movements for 11, January 2008

LONDON METAL EXCHANGE STOCKS

METAL


LAST


NET


PREV

COPPER


199275


-375


199650

ALUM.


939325


2850


936475

ZINC


94175


-25


94200

NICKEL


47544


-342


47886

LEAD


49250


-75


49325

TIN


11935


-60


11995

A.ALLOY


45400


-200


45600

NA.ALUM


107720


0


107720


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 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 Jan: Sell at 95.00-95.50 for the target of 91.50 and 90.10 with stop loss at 96.75

MCX Nickel Jan (Daily Chart)



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

MCXARUN
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