Energy

Crude oil on Multi Commodity Exchange (MCX) moved in a tight range of Rs four but closed with modest gains Saturday extending the 0.4 per cent rise noted a day earlier. MCX crude moved in a narrow range amid lack of cues from international exchange.

· On MCX, crude oil March contract closed trading at Rs 3,765 per barrel after a gain of Rs 10 and traded in a range of Rs 3,767 to Rs 3,763 per barrel.

· Over the week, March contract noted an increase of Rs 163 or 4.5 per cent. Feb contract expired at Rs 3,775 per barrel on Friday. MCX crude front month contract noted a 3.2 per cent rally in the previous week.

· MCX crude edged up today and noted a 4.5 per cent rise over the week. Crude futures on MCX surged this week tracking the upturn movement on international exchange. Nymex crude jumped 4.1 per cent this week extending the 3.2 per cent rally noted a week earlier.

· While Nymex crude edged up this week on supply concerns, concerns about the demand continued to weigh on market sentiments. U.S. Energy Information Administration, International Energy Agency and Opec all in their monthly oil report lowered demand growth forecast for the current year on concerns about the impact of slowdown on oil demand.

· Opec kept output steady at its Feb 1 meet and will now on March 5 to take stock of the market condition. Comments by Opec members have indicated that the oil cartel may consider cutting output taking into consideration rising oil and fuel stockpiles effect of weakening global economy on oil demand.

· While threat of Venezuela's to cut oil sales has been downplayed by experts it continued to underpin prices this week. Market players may continue to keep an eye on the matter in coming days. Crude futures on Nymex may witness volatile trade in the coming week as traders will square positions ahead of March contract expiration on Feb 20.

· On the economic front, market players will look ahead for reports on the National Association of Homebuilders Housing Market Index, the consumer price index, new home construction and leading indicators due in the coming weak for further indication about the health of the U.S. economy. Also in focus will be FOMC minutes, which will be released on Wednesday.

MCX Crude Oil March (Daily Chart)



Technical Outlook:

Momentum studies are 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 Crude Oil March: Buy at 3720-25 for the target of 3790 and 3830 with stop loss at 3680

MCX Natural gas Feb (Daily Chart)



Technical Outlook:

Momentum studies are 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:

Natural gas Feb: Buy at 340 for the target of 349 and 356 with stop loss at 337

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BULLION

Gold traded weak on Friday and followed trend on Saturday; market remains weak on international trend, as dollar has shown some recovery.

· MCX Gold April traded in range of Rs. 11490-11680 and Silver March trade in range of Rs. 21735-22290 per kg following international spot gold and silver. International spot gold settled at $902.20 per Toz and silver settled at $17.04 per Toz with loss.

· Gold fell, capping the first weekly loss in four, on speculation a recession will slow demand for the precious metal and other commodities.

· U.S. stocks declined as reports showed confidence among U.S. consumers fell to a 16-year low and manufacturing in New York contracted this month for the first time in almost three years. Gold demand dropped 17 percent in the fourth quarter of 2007 as higher prices deterred purchases by jewelers and retail investors. Gold reached a record $942.20 on Jan. 30.

· Global demand dropped to 843 metric tons from 1,013.4 tons in the last three months of 2007, the London-based World Gold Council said Feb. 13 in its quarterly report. Buyers from India, the world's biggest user, reduced purchases by 64 percent to 83.9 tons. Jewelry use dropped 17 percent. About 68 percent of gold demand last year came from jewelers.

· The dollar has fallen to week-lows against the euro Friday as a rate cut at the Federal Reserve's March meeting is priced into the market. Benchmark crude oil futures continued on from Thursday's breakout on concerns over growing tension betweenVenezuela and theUS.

· Markets are once again tipping anotherUS rate cut in March, which should give gold some added momentum and may be enough to break it out of its recent consolidation pattern.

Indian Bullion Spot Market

Precious metals was a tad up in spot markets with support from a weak dollar, high crude oil prices and expectations of yet another interest rate cut by the Federal Reserve.

· In Mumbai markets, gold (995) rose by Rs 15 to finish at Rs 11,700gm and gold (.999) by Rs 20 to Rs 11,755/10g respectively. Arrivals in gold were at 100 kilos. Silver (.999) shot up by Rs 25 to close at Rs 21,645/kg. Arrivals in silver were at 150 kilos.

· Chennai gold (995) and gold (.999) was up by Rs 10 to finish at Rs 11,800/10gm and Rs 11,850/10gm respectively whereas Silver (.999) closed up by Rs 250 at Rs 21,400/kg.

· Jaipur gold standard rose by Rs 100 to close at Rs.11,800/10gm whereas Silver (.999) finished steady at Rs 21,800/kg.

· Ahmedabad gold (995) increased by Rs 35 to end at Rs 11,685/10gm and gold (.999) decreased by Rs 55 to end at Rs 11,735/10gm respectively whereas Silver (.999) shot up by Rs 200 to close at Rs 22,100/kg.

· In Delhi bullion markets, gold (995) closed unchanged at Rs.11,750/10gm and gold (.999) at Rs 11,810/10gm respectively whereas Silver (.999) declined by Rs 300 to end at Rs.21,400/kg.

MCX Gold Apr (Daily Chart)



Technical Outlook:

Momentum studies are 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 Gold April: Buy at 11510-520 for the target of 11640 and 11690 with stop loss at 11485



MCX Silver Mar (Daily Chart)



Technical Outlook:

Momentum studies are 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 Silver March: Buy at 21900 for the target of 22100 and 22350 with stop loss at 21805

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Technicals – MCX (Intra day calls)

CRUDE OIL (March) BULLISH ABOVE 3773 BEARISH BELOW 3755

GOLD (April) BULLISH ABOVE 11566 BEARISH BELOW 11530

SILVER (March) BULLISH ABOVE 21957 BEARISH BELOW 21868

COPPER (February) BULLISH ABOVE 307.60 BEARISH BELOW 306.80

LEAD (February) BULLISH ABOVE 118.20 BEARISH BELOW 117.80

NICKEL (February) BULLISH ABOVE 1087 BEARISH BELOW 1082

ZINC (February) BULLISH ABOVE 92.50 BEARISH BELOW 92.10

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outlook

April gold closed lower on Friday as it extended this week's decline. Today's low-range close sets the stage for a steady to
lower opening on Tuesday. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near-
term. If March extends this week's decline, last week's low crossing at 888.40 is the next downside target. Closes above
Monday's high crossing at 931.00 are needed to renew the rally off last week's low. First resistance is Monday's high crossing
at 931.00 then January's high crossing at 942.20. First support is Wednesday's low crossing at 899.50. Second support is last
week's low crossing at 888.40.

March silver closed lower on Friday and the low-range close sets the stage for a steady to lower opening on Tuesday.
Stochastics and the RSI are overbought, diverging and are turning bearish signaling that a short-term top might be in or is near.
Closes below last week's low crossing at 16.230 are needed to confirm that a short-term top has been posted. If March extends
this week's rally, monthly resistance crossing at 17.870 is the next upside target. First resistance is Tuesday's high crossing at
17.650 then monthly resistance crossing at 17.870. First support is the 10-day moving average crossing at 17.003 then the 20-
day moving average crossing at 16.766.

March copper posted an inside day with a higher close on Friday as it consolidated some of Thursday's decline but remains
below the 75% retracement level of the October-December decline crossing at 352.60. The mid-range close sets the stage for a
steady opening on Tuesday. Stochastics and the RSI are overbought and are turning bearish signaling that a short-term top
might be in or is near. Closes below the 10-day moving average crossing at 344.65 would confirm that a short-term top has
been posted. If March extends this month's rally, the 87% retracement level crossing at 363.80 is the next upside target. First
resistance is Monday's high crossing at 359.90. Second resistance is the 87% retracement level crossing at 363.80. First
support is Thursday's low crossing at 345.60. Second support is the 10-day moving average crossing at 344.65.

March crude oil closed higher on Friday as it extends this week's rally. Profit taking tempered some of today's gains and the
mid-range close sets the stage for a steady opening on Tuesday. Stochastics and the RSI are overbought but remain bullish
signaling that sideways to higher prices are possible near-term. If March extends this week's rally, January's high crossing at
99.77 is the next upside target. Closes below the 20-day moving average crossing at 90.91 would confirm that a short-term top
has been posted. First resistance is today's high crossing at 96.67. Second resistance is January's high crossing at 99.77. First
support is the 10-day moving average crossing at 91.64. Second support is the 20-day moving average crossing at 90.91.

March Henry natural gas closed lower on Friday as it consolidated some of this week's rally but not before testing November's
high crossing at 8.830. The low-range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI
are overbought and have turned neutral hinting that a double top with November's high might be forming. If March extends this
month's rally, July's high crossing at 8.990 is the next upside target. Closes below Monday's gap crossing at 8.330 would
confirm that a double top has been posted. First resistance is today's high crossing at 8.847 then July's high crossing at 8.990.
First support is Monday's gap crossing at 8.330. Second support is the 10-day moving average crossing at 8.299.

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