basemetalos intraday

Basemetals
06 June 2008 12:38:58



Base Metals June 06, 2008

Major Economic Data:


The U.S. Labor Department said that jobless claims were down 18,000 last week to 357,000, lower than expected.
The Bank of England kept its interest rate unchanged at 5.0% and the European Central Bank kept its interest rate at 4.0%.
Germany's factory orders were down 1.8% in April, the fifth consecutive decline. Even so, ECB President Trichet said that the central bank may soon raise the interest rate to restrain inflation. The June euro is steady to higher.
In Canada, C$6.4 billion of building permits were issued in April, up 14.5% from March and the most in six months.


Copper


Copper headed for its third weekly decline as the dollar rallied against major currencies, reducing
demand for raw materials as an alternative investment.

Copper has fallen 11 percent from a record $8,880 a ton April 17 as inflationary pressures raise speculation central banks may tighten monetary policy, which may slow economic growth
and curb demand for the metal, according to Michael Widmer, director of metals research at Lehman Brothers Holdings Inc.

Copper may decline next week on expectations that slowing global economic expansion will curb
growth in demand for the metal. Eleven of 18 analysts and traders surveyed yesterday
forecast copper will decline next week. Five expected a gain and two were neutral. Copper for delivery in three months on the LME has fallen 0.3 percent this week, the third consecutive drop.

China, the world's largest user of the metal, will have slower demand growth for the metal this year, London-based researcher CRU and Barclays Capital said this week.

Copper warehouse stock at LME, net change was 1250 MT to 123500 MT

MCX Copper June - Technical Outlook:
Copper headed for its third weekly decline as the dollar rallied against major currencies, reducing demand for raw materials as an alternative investment. Copper has fallen 11 percent from a record $8,880 a ton April 17 as inflationary pressures raise speculation central banks may tighten monetary policy, which may slow economic growth and curb demand for the metal, according to Michael Widmer, director of metals research at Lehman Brothers Holdings Inc. Copper may decline next week on expectations that slowing global economic expansion will curb growth in demand for the metal. Eleven of 18 analysts and traders surveyed yesterday forecast copper will decline next week. Five expected a gain and two were neutral. Copper for delivery in three months on the LME has fallen 0.3 percent this week, the third consecutive drop. China, the world's largest user of the metal, will have slower demand growth for the metal this year, London-based researcher CRU and Barclays Capital said this week. Copper warehouse stock at LME, net change was 1250 MT to 123500 MT


The daily stochastics have crossed over up which is a bullish indication. MACD is heading downwards in positive region, showing decrease in bullish momentum. The prices closed above short term and medium term EMA, which supports bears.
Technical are neutral to bearish signalling sideways to lower prices in the near term. Initial support for the market is around 332.90 levels. If broken can see further fall to 328.80 and 325.75, If market holds above 335.95 further rally can be seen towards 340.05 and 343.10


Recommendations-MCX Copper June: Sell at 338 Target 335 and 331 SL 341

Nickel

Nickel prices traded strong on speculative buying following LME prices.

Nickel warehouse stock at LME, net change was 480 MT to 47592 MT


MCX Nickel June - Technical Outlook:


The daily stochastics have crossed over up which is a bullish indication. The prices closed above short term and medium term EMA, which supports bears. MACD is heading upwards in positive region, showing increase in bullish momentum.

Technical have turned neutral to bullish and market is expected to remain positive above 1008 level. If sustain above this level can see a rally towards 1020 and 1041, If market sustains below 988 can see a further fall towards 976 and 955.

Recommendations: MCX Nickel June: Buy at 985 Target 1003 and 1020 SL 965

Zinc

Hindustan Zinc Ltd., India's largest producer of the metal, lowered prices for the third time in eight days to match global rates.

The price of zinc was cut by 5,000 rupees, or 5 percent, to 92,700 rupees ($2,160) a metric ton.

Zinc warehouse stock at LME, net change was -25 MT to 143625 MT

MCX Zinc June - Technical Outlook:

The daily stochastics have crossed over up which is a bullish indication. The prices closed below short term and medium term EMA, which supports bears. MACD is heading upwards in positive region, showing increase in bullish momentum.

Technical are neutral to bearish signalling sideways to lower prices in the near term. Initial support for the market is around 83.4 level. If broken can see further fall to 82.3 and 81.3, If market holds above 84.4 further rally can be seen towards 85.5 and 86.5

Recommendations- MCX Zinc June: Sell at 85.20 Target 84 and 83 SL at 85.90

Lead

Hindustan Zinc Ltd., India's largest producer of the metal, lowered prices for the third time in eight days to match global rates.

Lead prices were kept unchanged at 96,700 rupees a ton.

Lead warehouse stock at LME, net change was 1025 MT to 72550 MT


MCX Lead June -Technical outlook:


The daily stochastics have crossed over down which is a bearish indication. The prices closed below short term and medium term EMA, which supports bears. MACD is heading downwards in positive region, showing decrease in bullish momentum.

Technical are neutral to bearish signaling sideways to lower prices in the near term. Initial support for the market is around 82.9 level. If broken can see further fall to 81.4 and 79.5, If market holds above 84.8 further rally can be seen towards 86.4 and 88.3

Recommendations –MCX Lead June: Sell at 85.10 Target 84 and 83 SL 86.20

Aluminium


MCX Aluminium traded sideways following tight movement at LME, while today’s SHFE inventory data might give further confirmation to trend while long-term market is still looking positive only.

Alum warehouse stock at LME, net change was -975 MT to 1072400 MT

MCX Aluminium June -Technical outlook:


The daily stochastics have crossed over up which is a bullish indication. The prices closed above short term and medium term EMA, which supports bears. MACD is heading upwards in positive region, showing increase in bullish momentum.

Technical have turned neutral to bullish and market is expected to remain positive above 124.4 levels. If sustain above this level can see a rally towards 125.9 and 127.5, If market sustains below 122.8 can see a further fall towards 121.3 and 119.7



Recommendations–MCX Aluminium June: Buy at 123 Target 124.50 and 126 SL at 121.80


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