energy

Crude-oil prices surged sharply after some delegates of the Organization of Petroleum Exporting Countries said the cartel should cut production to support the prices. Production stoppages in North Sea and Africa also continued to support the prices. Crude oil for March delivery on NYMEX soared $3.66 to end at $91.77 a barrel.

· MCX crude closed higher today and posted an increase of 3.2 per cent over the week. MCX crude surged this week tracking the upturn movement on international exchange. Nymex crude surged 3.2 per cent this week after sliding 1.9 per cent in the previous week.

· Nymex crude rallied 4.2 per cent yesterday, the biggest one day rise since Dec 12, to settle at the highest price since Jan 30. Nymex crude rose sharply yesterday on supply jitters related to Nigeria and Venezuela, expectations of higher demand for heating fuels as colder weather is forecasted in U.S. Northeast this weekend, speculation that OPEC will cut output at it March meet and reports that North Sea crude oil shipments may fall in March.

· MCX gas closed weaker today but noted an increase of 6.6 per cent over the week tracking the upturn movement on international exchange. Nymex gas surged 7.2 per cent this week after falling 2.7 per cent in the previous week.

· Nymex gas jumped 2.5 per cent Friday to settle at the highest price since Jan 14. Nymex gas surged for the fifth day yesterday supported by sharp rise in crude oil futures and expectations that heating demand may increase as colder weather is forecasted for U.S. Northeast and Midwest in the near term.

· Recent build up in US crude oil inventories and lower demand during shoulder period is likely to induce OPEC to cut production in its forthcoming meeting on 5th March. Some deligates of the cartel have already given signals for the same recently.

· Halt in crude oil production in Nigeria and North Sea is also lending some support to the crude oil prices. Royal Dutch Shell said Thursday it was halting 130,000 barrels per day of Nigerian output because of pipeline leaks. The oil supplies from Africa's biggest oil producer and a major U.S. supplier is likely to fall due to the nation's deteriorating security situation and planned maintenance.

· The crude oil prices also rose on news that North Sea oil production has been cut by 280,000 barrels a day due to technical problems at a Total SA oil field, and that Russian crude output could fall this year due to the depletion of a large oil field.

MCX Crude Oil 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:

MCX Crude Oil Feb: Buy at 3580 for the target of 3660 and 3730 with stop loss at 3535



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:

MCXARUN
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Bullion

Gold futures rose Friday as crude oil rallied sharply, and also on safe-haven buying amid the ongoing uncertainty about other financial markets. Fund buying was reported.

· Gold trades up on MCX tracing Friday's gains in international gold and oil markets. Further supporting the precious metals complex were the ongoing supply problems in South Africa and the mild fall in dollar against the euro.

· On Friday, International spot gold last traded at USD 923.20 troy an ounce, edging up by USD 11.80. It touched an all time high of USD 936.70 troy an ounce on 30th January. Meanwhile New York Mercantile Exchange (NYMEX) crude oil added more than USD 3 to settle at around USD 92 per barrel.

· On MCX, benchmark April closed near weekly high of Rs.11738 per 10 gram following continuous gains from last four days. Similarly MCX Silver march also closed near weekly high of Rs.21926 per kg .

· Bullion having strong recovery of 4% from weekly lows and indicating further bullish momentum ahead.

Indian Bullion Spot Market

Spot gold is trading firmly back above USD900 a troy ounce Friday and spot platinum continues to be supported by supply concerns stemming from power shortages inSouth Africa.

· In Mumbai markets, gold (995) elevated by Rs 80 to finish at Rs 11,710/10gm and gold (.999) by Rs 75 to finish at Rs 11,760/10g. Arrivals in gold were at 200 kilos and traded volumes at 100 kilos. Silver (.999) was up by Rs 265 to close at Rs.21,370/kg. Arrivals in silver were at 150 kilos and traded volumes at 100 kilos.

· Chennai gold (995) and gold (.999) increased by Rs 80 to finish at Rs 11,730/10gm and Rs 11,780/10gm respectively whereas Silver (.999) edged up by Rs 250 to close at Rs 20,900/kg.

· Jaipur gold standard shot up by Rs 100 to close at Rs.11,800/10gm whereas Silver (.999) rose by Rs 100 at Rs 21,200/kg.

· Ahmedabad gold (995) advanced by Rs 75 to close at Rs 11,705/10gm and gold (.999) by Rs 70 to 11,750/10gm respectively whereas Silver (.999) was up by Rs 325 to close at Rs 21,525/kg.

· In Delhi bullion markets, gold (995) rose by Rs 160 to close at Rs.11,760/10gm and gold (.999) by Rs 80 to Rs 11,820/10gm respectively whereas Silver (.999) ends Rs.21,100/kg, up by Rs 400.

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: Sell at 11720-730 for the target of 11640 and 11590 with stop loss at 11745



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 21900-930 for the target of 21890 and 21750 with stop loss at 22010

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Metals & Energy Outlook

Technicals – MCX (Intra day calls)

CRUDE OIL (February) BULLISH ABOVE 3617 BEARISH BELOW 3600

GOLD (April) BULLISH ABOVE 11740 BEARISH BELOW 11702

SILVER (March) BULLISH ABOVE 21942 BEARISH BELOW 21850

COPPER (February) BULLISH ABOVE 307.20 BEARISH BELOW 306.40

LEAD (February) BULLISH ABOVE 117.70 BEARISH BELOW 117.20

NICKEL (February) BULLISH ABOVE 1105 BEARISH BELOW 1100

ZINC (February) BULLISH ABOVE 97.20 BEARISH BELOW 96.80

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outlook

April gold closed higher on Friday and above the 10-day moving average crossing at 916.90 tempering the near-term bearish
outlook in the market. The high-range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI
are turning neutral to bullish signaling that sideways to higher prices are possible near-term. If March extends this week's rally,
January's high crossing at 942.20 is the next upside target. Closes below Tuesday's low crossing at 888.40 would open the door
for a larger-degree decline during February. First resistance is today's high crossing at 924.50 then January's high crossing at
942.20. First support is the 20-day moving average crossing at 908.30. Second support is Tuesday's low crossing at 888.40.

March silver closed higher on Friday and the high-range close sets the stage for a steady to higher opening on Monday.
Stochastics and the RSI are turning neutral to bullish signaling that sideways to higher prices are possible near-term. If March
extends this week's rally, this month's high crossing at 17.345 then weekly resistance crossing at 17.500 are the next upside
targets. First resistance is today's high crossing at 17.220 then last Friday's high crossing at 17.345. First support is today's
low crossing at 16.785 then the 20-day moving average crossing at 16.494.

March copper closed sharply higher for the third day in a row on Friday and spiked above the 75% retracement level of the
October-December decline crossing at 352.60. The high-range close sets the stage for a steady to higher opening on Monday.
Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near-term. If March extends today's
rally, the 87% retracement level crossing at 363.80 is the next upside target. Closes below the 10-day moving average crossing
at 330.82 would confirm that a short-term top has been posted. First resistance is today's high crossing at 356.40. Second
resistance is the 87% retracement level crossing at 363.80. First support is today's low crossing at 342.50. Second support is
the 62% retracement level crossing at 340.77.

March crude oil closed sharply higher on Friday and above the 20-day moving average crossing at 90.25. Today's high-range
close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI are turning neutral to bullish signaling
that sideways to higher prices are possible near-term. Closes above last week's high crossing at 92.71 are needed to confirm that
a short-term low has been posted. If March extends the decline off last week's high, January's low crossing at 85.42 is the next
downside target. First resistance is today's high crossing at 91.94. Second resistance is last week's high crossing at 92.71. First
support is Thursday's low crossing at 86.24. Second support is January's low crossing at 85.42.

March Henry natural gas closed higher on Friday and the high-range close sets the stage for a steady to higher opening on
Monday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near-term. If March
extends this week's rally, January's high crossing at 8.397 is the next downside target. Closes below the 20-day moving average
crossing at 7.980 would temper the near-term friendly outlook in the market. First resistance is today's high crossing at 8.33
then January's high crossing at 8.397. First support is today's low crossing at 8.059. Second support is the 20-day moving
average crossing at 7.980.

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GENERAL MARKET CONDITIONS

In 2008 the trend so far in gold has been that gold rises multiple times faster than declining including last week. It seems equity investors are the most nervous lot as they increase their investment in gold and gold related instruments. Every now and then we hear comments on the progress of the global economy from some central banker, political leader, or big names in hedge fund industry. These comments are only creating uncertainty in the mindset of equity investors which is benefiting gold more than any other investment. Humans have two ears, two nose, two eyes, two hands, two legs and one big mouth. These guys are using only their big mouths instead of doing something positive to ensure that global financial markets stabilize. Unless the influential people stop using their big mouths global financial markets will be volatile and gold will benefit more than any other financial instrument.

Interest rate cuts will not create overnight growth. There is a time lag for interest rate cuts to have a trickle down effect which may vary from two months to six months. Equity investors need to be patient and remain invested in sector specific stocks and also look for stocks which offer cheap valuations. 2008 will provide a good long term investment opportunity in all markets including India. However returns will be lower than 2007 which investors have to realize.

It's interesting how weather has changed the outlook for base metals. Earlier traders and investors were going short in base metals on every rise and now the reverse is happening. Record Snowfall in China will result in greater demand for base metals, despite expectations of a global slowdown in 2008. China will need more copper and aluminum for electricity transmission and other areas. Factories which were closed due to snowfall will start and there will be greater short term demand for base metals than earlier expected in short term. Steel is still a great long term bull story. Copper, zinc, nickel and lead can rise in the short term and may in the next two to three months but the rise will be accompanied by a high degree of volatility.

The G7 has approved IMF gold sales, which could start as early as April, which is far off. This will not alter the medium term bullish in gold. In the short term gold can fall if some of the traders reduce their longs. This week gold will be volatile. The technical picture is still bullish in gold but will be vulnerable to sharp corrections. It's all about "pace" not just for the day for day traders but also for the medium term traders in gold and silver. "Pace" implies speed of rise or speed of decline in gold and silver. If one is able to determine the pace correctly, he will mint money.

GOLD -- APRIL FUTURE -- INTRA DAY PIVOT:$920.30

$924 price target achieved, gold now has to break $942 for $954 and $968. For the day gold has to fall below $916 for a move back to $904 and $897.0

NYMEX CRUDE OIL -- FUTURE -- INTRA DAY PIVOT: $90.20

Crude oil targets $94.56 and $99.77 as long as $89.90 holds.

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outlook

April gold closed higher on Thursday as it consolidated some of Tuesday's decline but remains below the 10-day moving
average crossing at 916.20. The high-range close sets the stage for a steady to higher opening on Friday. Stochastics and the
RSI remain bearish signaling that sideways to lower prices are possible near-term. If March extends this week's decline, the
25% retracement level of the August-January rally crossing at 873.90 is the next downside target. Closes above the 10-day
moving average crossing at 916.30 would temper the near-term bearish outlook in the market. First resistance is today's high
crossing at 915.20 then the 10-day moving average crossing at 916.30. First support is Tuesday's low crossing at 888.40 then
the 25% retracement level crossing at 873.90.

March silver closed higher on Thursday as it consolidated some of the decline off last Friday's high. The high-range close sets
the stage for a steady to higher opening on Friday. Stochastics and the RSI remain bearish signaling that a short-term top might
be in or is near. Closes below the 20-day moving average crossing at 16.451 are needed to confirm that a short-term top has
been posted. If March renews the rally off December's low, weekly resistance crossing at 17.500 is the next upside target. First
resistance is last Friday's high crossing at 17.345 then month resistance crossing at 17.500. First support is Wednesday's low
crossing at 16.230 then the 25% retracement level of the August-February rally crossing at 15.895.

March copper closed sharply higher on Thursday and above the 62% retracement level of the October-December decline
crossing at 340.77. The high-range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI are
neutral to bullish signaling that sideways to higher prices are possible near-term. If March extends today's rally, the 75%
retracement level crossing at 352.60 is the next upside target. Closes below Wednesday's low crossing at 317.10 would confirm
that a short-term top has been posted. First resistance is today's high crossing at 346.20. Second resistance is the 75%
retracement level crossing at 352.60. First support is today's low crossing at 317.10. Second support is the 20-day moving
average crossing at 324.55.

March crude oil closed higher on Thursday as it consolidates some of this week's decline but remains below the 10-day moving
average crossing at 89.97. Today's high-range close sets the stage for a steady to higher opening on Friday. Stochastics and the
RSI remain bearish signaling that sideways to lower prices are possible near-term. If March extends this week's decline,
January's low crossing at 85.42 is the next downside target. Closes above last week's high crossing at 92.71 are needed to
confirm that a short-term low has been posted. First resistance is the 10-day moving average crossing at 89.97. Second
resistance is the 20-day moving average crossing at 90.32. First support is today's low crossing at 86.24. Second support is
January's low crossing at 85.42.

March Henry natural gas closed higher on Thursday and the high-range close sets the stage for a steady to higher opening on
Friday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near-term. Closes above last
week's high crossing at 8.123 are needed to renew the rally off January's low and would open the door for a possible test of
January's high crossing at 8.397 later this winter. If March renews the decline off January's high, January's low crossing at
7.534 is the next downside target. First resistance is today's high crossing at 8.130 then January's high crossing at 8.397. First
support is Monday's low crossing at 7.580. Second support is January's low crossing at 7.534.

MCXARUN
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GENERAL MARKET CONDITIONS

The European central bank has shifted its focus from inflation to growth after it acknowledged that the Eurozone will be affected by a slowdown in the US economy. Bank of England and Fed interest rate cuts will only prevent investors from investing in equities. If the investor cannot invest in equities, bond yields are too low to invest as they do not cover inflation, real estate prices are volatile, emerging market equities provide cheap valuations at the current prices but are volatile, then where should he park his money? My answer is only commodities which include a balance between soft commodities, precious metals and base metals. If investment in commodities rises, gold will rise and will detach itself away from the movement in the currency markets.

Gold and silver will be volatile for the rest of the day. Silver and copper should outperform gold. Crude oil is finding buyers at higher levels. It remains to be seen whether traders will square off their positions over the weekend or go long. Base metals should rise further as there is a technical break out. Zinc, its better to remain on the sidelines as there are huge longs at higher levels and investors are also averaging at lower levels.

GOLD -- APRIL FUTURE -- INTRA DAY PIVOT:$898.0

As long gold holds $897 it will target $924 and $942 once again. Gold has to fall below $897 for further losses to $887 and $872.0

COPPER -- MARCH FUTURE -- INTRA DAY PIVOT: $336.60

As long as copper holds $336 it will target $360.50 and $372 in the short term. LME copper 3 months can rise to $7900 if it holds $7425.

MCXARUN
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