basemetals intraday

Basemetals
30 May 2008 10:36:07



Base Metals May 30, 2008

Major Economic Data:
The U.S. Commerce Department said that real GDP was up .9% in the first quarter and up 2.5% from a year ago, as expected. Nominal GDP was up 4.8% from a year ago, a far cry from a recession.


The U.S. Labor Department said that jobless claims were up 4,000 last week to 372,000, roughly as expected.
The Conference Board said that its index of leading indicators for Australia was down .4% in March to 184.2.


Germany's Federal Employment Office said that the unemployment rate improved from 8.0% to 7.8% in May, the lowest in over 15 years.

Copper

Copper fell the most in four weeks as the dollar rallied, eroding the appeal of commodities as alternative investment.

The U.S. currency rose to the highest level in more than a week against the euro. Treasuries fell on speculation that the Federal Reserve is more likely to raise borrowing costs this year. Before today, copper rose 22 percent this year as the dollar fell 6.7 percent against the euro. Some investors buy copper to preserve value when the U.S. currency declines.

Stockpiles monitored by the London Metal Exchange climbed 600 metric tons, or 0.5 percent from yesterday, to 126,400 tons, the highest since March 13. Inventories have risen 14 percent this month.

BHP Billiton Ltd. may produce less copper in Chile because of power shortages, El Mercurio said, citing Diego Hernandez, president of base metals.

Chile, the world's biggest copper producer, said its output of the metal fell 5.6 percent in April from a year earlier. Production fell to 435,132 metric tons from 460,819 tons in April 2007, the state-run national statistics institute said today in a report distributed in Santiago.

The following table lists China's production of concentrates for copper, lead and zinc in April and for the first four months of this year.

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 330.5 If market breaches below 330.5 may see prices to take further correction towards 325.8 and 317.5 However if it holds back above 343.6 may see prices to rise further on today. Major resistance is seen at 351.9 and 356.6

Recommendations-MCX Copper June: Sell at 338 Target 332 and 327 SL 341.20


Nickel

London Metal Exchange nickel fell through a key support level to near a two-year low Thursday as base metals came under pressure amid elevated crude oil prices, a dollar rebound and limited trade interest at lower levels.

LME nickel fell to $22,300 a metric ton, down 24% this month, and at levels not seen since July 2006.
Nickel has fallen amid continued concern about lacklustre Chinese stainless demand, as well as large stockpiles of nickel concentrate in China.

Nickel warehouse stock at LME, net change was 18 MT to 48522 MT


MCX Nickel 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 945 If market breaches below 945 may see prices to take further correction towards 934 and 915 However if it holds back above 975 may see prices to rise further on today. Major resistance is seen at 994 and 1005

Recommendations: MCX Nickel June: Sell at 960 Target 945 and 930 SL 972

Zinc

Zinc slumped by the exchange-imposed daily limit to a record low in Shanghai on speculation demand may be slowing as global inventories climbed to a 20-month high.

Stockpiles of zinc in London Metal Exchange warehouses rose 5.8 percent to 143,500 metric tons yesterday, the highest since September 2006. This is also the biggest gain since Jan. 7. Zinc inventories in Shanghai stood at 69,130 tons last week, 72 percent above a year ago.



MCX Zinc 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 83.0 If market breaches below 83.0 may see prices to take further correction towards 80.9 and 76.8 However if it holds back above 89.3 may see prices to rise further on today. Major resistance is seen at 93.4 and 95.5

Recommendations- MCX Zinc June: Sell at 86 Target 84 and 82 SL 87.20

Lead

LME 3-month lead unlikely to suffer more heavy selling short-term, although technical still look bad, MCX Lead June traded towards the low of 83 a kg.

Lead warehouse stock at LME, net change was 1550 MT to 65125 MT

MCX Lead 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 81.5 If market breaches below 81.5 may see prices to take further correction towards 79.8 and 76.9 However if it holds back above 86.0 may see prices to rise further on today. Major resistance is seen at 88.9 and 90.6

Recommendations –MCX Lead June: Sell at 84 Target 81 and 79 SL 85.50

Aluminium

MCX Aluminium dropped below 122 following other metals at LME

Indian aluminium maker National Aluminium Company Co. Ltd. (532234.BY) Tuesday said net profit for the fiscal fourth quarter fell 30.6% on year. Net profit for the January-March period dropped to 4.09 billion rupees ($101.83 million) from INR5.90 billion.

Alum warehouse stock at LME, net change was 4875 MT to 1077175 MT

MCX Aluminium 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 119.5 If market breaches below 119.5 may see prices to take further correction towards 117.0 and 112.5 However if it holds back above 126.5 may see prices to rise further on today. Major resistance is seen at 131.0 and 133.5

Recommendations–MCX Aluminium June: Sell at 123 Target 121 and 119 SL 124.60


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