basemetals intraday

Base Metals
20 May 2008 09:24:05



Major Economic Data:

The Conference Board's index of leading indicators was up .1% in April, a little better than expected. Six of the ten indicators showed positive gains.

Construction output in the Euro area 15 was down 2.2% in March and down 1.4% from a year ago.

Copper

Copper fell the most in a week as inventories monitored by the London Metal Exchange climbed to the highest in two months.

Stockpiles rose 1,500 metric tons, or 1.2 percent, to 122,725 tons, the highest since March 19. Including supplies tallied by exchanges inNew York andShanghai, inventories were 183,901 tons, or 3.6 days of global consumption.

Reconstruction of homes, schools, bridges and roads afterChina's most powerful earthquake in more than half a century may have a limited impact on the country's overall demand for metals, analysts and a company executive said.

Contract workers at Codelco, the world's biggest copper producer, showed up for their jobs today under a threat of renewed protests over bonus payments.

MCX Copper June - 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 negative and the support is seen at 347.6 If market breaches below 347.6 may see prices to take further correction towards 344.6 and 340.7; However if it holds back above 354.4 may see prices to rise further on today. Major resistance is seen at 358.3 and 361.3

Recommendations-MCX Copper June: Sell at 351 Target 346 and 344 Stop loss 353.20



Nickel

MCX Nickel June dropped towards 1107 and settled with loss following LME and Copper.

The surplus of nickel shrank to the least in a year in March after production fell for two straight months, data from the International Nickel Study Group showed.

World output beat demand by 1,700 metric tons in March, the smallest amount since February 2007, when there was a deficit of 4,000 tons, the Lisbon-based group said in a May 16 report.

Production dropped 1 percent to 117,500 tons in March, the lowest since November and down 4.9 percent from a year ago, it said. Consumption was 115,800 tons, the highest in a year.

Thirteen straight monthly surpluses have pushed prices down 48 percent in the past year. Outokumpu Oyj, the fourth-largest stainless-steel maker, posted a 79 percent drop in quarterly profit last month on losses linked to nickel inventories.

Nickel warehouse stock at LME, net change was –144 MT to 49494 MT

MCX Nickel 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 1107.0 If market breaches below 1107.0 may see prices to take further correction towards 1100.5 and 1094.0; However if it holds back above 1120.0 may see prices to rise further on today. Major resistance is seen at 1126.5 and 1133.0

Recommendations:MCX Nickel May: Sell at 1115 Target 1103 and 1085 Stop loss 1124



Zinc

Zinc fell the most in eight weeks on inLondon, dropping from the biggest weekly gain in almost six months as analysts said the Chinese earthquake that may have claimed 72,000 lives will have a limited effect on production.

About 300,000 metric tons of smelting capacity was affected by the May 12 tremor centered in Sichuan, Macquarie Group Ltd. said in a report today. The figure is less than 1 percent of theChina's annual output, according to the Sydney-based company.The country is the world's largest producer of the metal.

Zinc warehouse stock at LME, net change was 5075 MT to 128575 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 negative and the support is seen at 94.8 If market breaches below 94.8 may see prices to take further correction towards 93.5 and 91.3; However if it holds back above 98.2 may see prices to rise further on today. Major resistance is seen at 100.4 and 101.7

Recommendations-MCX Zinc May:Sell at 97 Target 95 and 93 Stop loss 98.10



Lead

MCX Lead dropped almost by 4% following other metals and LME trend. Market took correction from recent high of 99.90 on Friday.

Lead warehouse stock at LME, net change was 1150 MT to 64350 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 94.8 If market breaches below 94.8 may see prices to take further correction towards 93.5 and 91.4; However if it holds back above 98.2 may see prices to rise further on today. Major resistance is seen at 100.3 and 101.6

Recommendations –MCX Lead May: Sell at 96 Target 94 and 92 Stop loss at 97.20



Aluminium

MCX Aluminium dropped almost by 1.70% following LME heavy Inventory, while other base metals also supported the move.

Aluminium warehouse stock at LME, net change was 10425 MT to 1039550 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 126.7 levels. If market breaches 126.7 may see prices to take further upside towards 127.5 and 128.1;however if it holds back below 125.4 may see prices to fall further on today. Major support is seen at 124.8 and 124.0

Recommendations–MCX Aluminium May: Sell at 126 Target 124 and 122 Stop loss at 127.20

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