basemetals intraday

Base Metals
08 May 2008 09:44:55



Major Economic Data:

The U.S. Labor Department said that worker productivity was up an annual rate of 2.2% in the first quarter, better than expected. Unit labor costs were up an annual rate of 2.2% in the first quarter, down from a 2.8% annual gain in the fourth quarter.

There is no encouragement for the housing industry here - the National Association of Realtors said that the pending home sales index was down 1.0% in March and down 20.1% from a year ago. Surprisingly, July lumber is steady to higher.

Copper

Copper dropped for the second straight day on concern a 26 percent jump in prices this year will curb demand fromChina, the world's largest user of the metal. MCX Copper June traded mixed and remained weak for the day following international movement at LME and COMEX.

Copper rose to a record two days ago inNew York as labor unrest and falling inventories spurred supply concerns. Usage in China fell 1.3 percent in January from a year earlier, the International Copper Study Group said last week, and higher prices pose a ``risk'' to consumption, Freeport-McMoRan Copper & Gold Inc. has said.

Contract workers atChile's state-owned Codelco called off the strike after the market closed on May 5, and the company said two mines restarted production. The company'sEl Salvador mine remains closed today, the company said.

Chile's state-owned Codelco, the world's biggest copper producer, said itsEl Salvador mine remains shut for an evaluation of damage to equipment after a 20-day strike.

Copper production inZambia,Africa's largest producer of the metal, rose 6.9 percent in March, the Bank of Zambia said, without providing a reason for the increase.

Output climbed to 43,892 metric tons in the month, from 41,062 tons in the same period a year earlier, the central bank said in a report today in the capital,Lusaka. Exports declined to 38,872 tons, from 46,085 tons, it said.

The index of pending home sales fell 1 percent to 83, following a 2.8 percent drop in February that was larger than previously reported, the National Association of Realtors said today inWashington.

Copper warehouse stock at LME, net change was -625 MT to 109025 MT

MCX Copper June - 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 345.1 If market breaches below 345.1 may see prices to take further correction towards 342.9 and 340.3 However if it holds back above 349.8 may see prices to rise further on today. Major resistance is seen at 352.4 and 354.6

Recommendations-MCX Copper June: Buy at 345 Target 351 and 354 SL 342.10



Nickel

MCX Nickel May traded weak following movement at LME, while correction in Bullion and weak copper prices also supported the move.

Nickel warehouse stock at LME, net change was -144 MT to 51234 MT

MCX Nickel 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 1180.5 levels. If market breaches 1180.5 may see prices to take further upside towards 1196.5 and 1213.0, however if it holds back below 1148.0 may see prices to fall further on today. Major support is seen at 1131.5 and 1115.5

Recommendations:MCX Nickel May: Buy at 1160-55 Target 1178 and 1184 SL 1148


Zinc

MCX Zinc May traded mixed on LME hints, market initially pushed up on LME Inventory data but correction in Bullion and weak copper prices pushed market down. Although movement was much tight in range of 91.85 – 93.75

Zinc warehouse stock at LME, net change was -1525 MT to 125350 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 positive and the resistance is seen at 93.4 levels. If market breaches 93.4 may see prices to take further upside towards 94.5 and 95.3, however if it holds back below 91.5 may see prices to fall further on today. Major support is seen at 90.7 and 89.6

Recommendations-MCX Zinc May: Buy at 92 Target 94 and 96 Stop loss at 91.05



Lead

MCX Lead May traded was down by almost 5%, following international movement while correction in Bullion and weak copper supported the movement. Heavy stock in in LME warehouse pushed market more down.

Lead warehouse stock at LME, net change was 625 MT to 58825 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 98.3 If market breaches below 98.3 may see prices to take further correction towards 96.2 and 92.6, However if it holds back above 104.1 may see prices to rise further on today. Major resistance is seen at 107.7 and 109.8

Recommendations –MCX Lead May: Sell at 102 Target 99.20 and 98 SL 103.50



Aluminium

MCX Aluminium may traded weak and was down by almost 1% following international market. Market was pushed down mostly because of bullion, Copper and Lead prices.

Aluminium warehouse stock at LME, net change was 2950 MT to 1039275 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 120.0 levels. If market breaches 120.0 may see prices to take further upside towards 121.2 and 122.0 however if it holds back below 117.9 may see prices to fall further on today. Major support is seen at 117.1 and 115.9

Recommendations–MCX Aluminium May: Buy at 118-118.50 Target 120 and 121 SL 117.10

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