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

MCXARUN
9994500540

GENERAL MARKET CONDITIONS

US senators are now trying to bail out the US consumer drenched in housing woes. Leaders of the U.S. Senate Banking Committee had reached a deal on legislation to create a multibillion-dollar mortgage rescue fund and a new regulator for housing finance companies Fannie Mae and Freddie Mac. The plan would enable the Federal Housing Administration to guarantee billions of dollars in refinanced mortgages for homeowners whose properties have fallen in value since they took out their loans. The rescue plan would give a federal guarantee to failing mortgages once the lender erased at least 15 percent of the original loan amount, an offer that might appeal to mortgage investors who have seen foreclosures spike and home values sink over the past 12 months. This move is just a cover up of past failed measures. It remains to be seen whether it reaches the needy or fund managers stifle away with the funds, just like we have in India on most government sponsored schemes. Short term gains for the US economy and long term pains as it will create yet another bubble over the coming years.

Silver has disappointed. I am more of a silver bull than a gold bull and silver’s under performance will prevent volumes from picking up. But do not write off silver as it is a sleeping dragon. Silver rises very swiftly and also falls very swiftly. The year to date (YTD) return on silver is 14.99% as compared to 9.19% in gold. Silver is a great long term investment but volatility will rise as it gets caught between base metals and precious metals. Long term silver is still a better bet than gold and is a great investment on any five to ten percent dips from the current prices.

Nickel has disappointed among the base metals. There are more long positions than short in Nickel. LME Nickel (3 months) has to hold $25006 in the short term to prevent a fall to $23211 and below. Technically it is highly oversold. Short term the fundamental picture is still negative for nickel as demand remains week.

NYMEX CRUDE OIL

Crude oil has to hold $122.90 on closing basis to be in bullish zone else a fall back to $119.60 and $116.20. Resistance at $128.30 and $130.90.

MCXARUN
9994500540

GENERAL MARKET CONDITIONS

This is the pre-holiday week as US pit trading is closed for Memorial Day holiday next Monday. There will be positional squaring and rebuilding before traders leave for the long weekend. US summer driving season begins with the Memorial day and US demand could be the key for the short term movement of crude oil and energy prices. Higher Asian and emerging market demand are being reflected in the current crude oil prices. Crude oil options are also expiring this week. Crude oil could fall towards the close of the week as traders booked profit on their longs.

As far as base metals are concerned they are expected to remain firm for the rest of the month. The prime reason being is that China will import more base metals for reconstruction of the towns destroyed by the earth quake. Markets have started slowly factoring Chinese post earthquake demand but are waiting for a clear picture to emerge before taking the investment decision.

COPPER -- JULY FUTURE -- INTRA DAY PIVOT: $382.8

$383 price target achieved. Copper has to break $387 for $397 and $407. On the lower side as long as $377 holds downside will be limited.

MCXARUN
9994500540

safe trade calls

GOLD

book profit on buy abv 12950-975, for the day buy only abv 12125 S/L 12105 and T/p 12150-175/12240/12290 towards 12400 OR buy ard 11890-895 S/L 11880 and T/p 11940-975, now as long support of 11975-930 uprally likely to continue. (any time close above 12300-400/13100/13425 bullish while close below 11725/11460/11150/11000-10925 bearish for medium term)


SILVER

we book profit on buy abv 23350, for the day buy only abv 23475-525 S/L 23410 and T/p 23600-675/close abv 23675 test 24100-200 atleast in coming days OR sell only below 22900 S/L 22970 and T/p 22825/750/sustain below towards 22350-300 and close below 22300 seen new down rally (any time close below 22750-300/21575-500/20400/19250/ 18775 bearish rally while close above 23675/24500/26300/27700 bullish for medium term)


CRUDE

we book profit on sell below 5200, for the day sell only below 5120-110 S/L 5150 and T/p 5060-50/towards 5000-4900 in coming days OR sell ard 5305-10 S/L 5320 and T/p 5270-40/5200, only close abv 5350 test 5450 atleast (now crude need to close above 5350-60 for bullish rally while close below 5120/ 5050/4740/4450 bearish for medium term)


COPPER


book profit on buy abv 346.5-347, for the day buy only abv 351 S/L 349.75 and T/p 353.5/356-358.5/361.5/bullish rally OR buy ard 341.5-342 S/L 341 and T/p 344-46/347.5, now as long support of 340-41 uprally likely to continue (upside strong rally only on close above 361.5 while close below 340.5/336/330-326.5/ 310 bearish for medium term)


MCXARUN
9994500540

energy intraday

Energy
16 May 2008 09:48:40



Crude oil fell more than $2 a barrel inNew York after an Energy Department report showed that U.S.supplies of natural gas, which competes with petroleum-based fuels, increased more than forecast last week

Crude oil rose Earlier, after a report showed that economic growth in countries using the euro accelerated in the first quarter, signaling that European fuel use will climb. Gross domestic product in the 15 countries increased 0.7 percent from the fourth quarter and Demand for oil continues to rise in emerging markets even as prices reach a record, Saudi Arabian Oil Minister Ali al-Naimi said in a speech in Seoul yesterday

The Organization of Petroleum Exporting Countries cut its 2008 global oil demand forecast for a second time in three months as some producers report difficulties selling ``heavy'' crude grades.


OPEC, which controls more than 40 percent of the world's crude oil supply, forecasts 2008 oil demand will be 86.95 million barrels a day, a 1.2 million barrel a day gain from 2007. The estimate is a ``slight downward revision'' of 20,000 barrels a day from last month's estimate



Total OPEC production averaged 31.7 million barrels a day in April, a drop of nearly 400,000 from March on disruptions in Nigeria and Iraq



OPEC cut this month's estimate of 2008 oil supply from outside OPEC by 106,000 barrels to 50.18 million barrels a day on lower production from Mexico and the North Sea. Total output from non-OPEC producers will increase by 740,000 barrels a day this year, OPEC said.



UBS AG, Europe's biggest bank by assets, raised its 2008 price forecast for West Texas Intermediate crude oil by 32 percent because of supply disruptions and increasing demand for middle-distillate fuels. The bank lifted this year's forecast to $115 a barrel from $87 a barrel, and its 2009 estimate for WTI crude by 54 percent to $120 a barrel,



Natural gas in storage in the U.S. rose last week and is 0.2 percent above the five-year average for this time of year, a government report said Thursday. The inventory level was slightly above the five-year average, but well below last year's storage level of about 1.82 trillion cubic feet, according to the government data.



Devon Energy Corp. officials say the Oklahoma City-based company has reached a milestone in its production of natural gas from the Barnett Shale. Devon's production from the shale in north Texas surpassed 1 billion cubic feet of natural gas equivalent during April. The company says it reached that production level 21 months ahead of schedule


MCX Crude Oil June

Technical Outlook:The daily stochastic have crossed over up which is a bullish indication. The stochastic 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 5430 levels. If market breaches 5430 may see prices to take further upside towards 5499 and 5654 however if it holds back below 5206 may see prices to fall further on today. Major support is seen at 5051and4982

Recommendations-MCX Crude Oil June: Buy at 5060 Target 5110 and 5200 Stop loss 5025



MCX Natural gas May

Technical Outlook:The daily stochastic have crossed over up which is a bullish indication. The stochastic 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 491.00levels. If market breaches 491.00 may see prices to take further upside towards 505.00 and513.00 however if it holds back below 469.00 may see prices to fall further on today. Major support is seen at 461.00 and 447.00

Recommendations-MCX Natural Gas May: Buy at 469 Target 474 and 480 Stop loss at 466


MCXARUN
9994500540

bullion intraday

Bullion
16 May 2008 09:44:37



Indian spot gold edged higher on Thursday, as the rupee plunged to a 13-month low against the U.S. dollar, heightening the precious metal's appeal as an alternative investment. A weak dollar was balanced by a return of risk appetite to the equity market and continued subdued buying from jewellers. Although demand is expected to ease over the summer months

India's rupee fell to a 13-month low on concern near-record oil prices will boost the nation's import bill, widening the trade and current account deficits


Gold rose as the dollar's rally stalled and energy costs climbed, boosting the appeal of the precious metal as a hedge against inflation. Silver also gained.


The dollar fell against a weighted basket of the euro, yen, pound and three other major currencies, and crude-oil prices rose as much as 1.4 percent. Gold is still down 15 percent from a record $1,033.90 an ounce on March 17, when crude oil and the euro set previous highs.



Gold has had a correlation of 0.67 to the euro-dollar exchange rate this year, up from 0.58 last year, Bloomberg data show. A figure of 1 would mean the two move in lockstep. The euro climbed for the first time in three days after the German economy grew at the fastest pace in 12 years, reducing the likelihood that the European Central Bank will lower interest rates.



Russia's foreign currency and gold reserves, the world's third largest, rose to a record $536.8 billion, the central bank said. The value of reserves increased by $2.9 billion in the week ended May 9, Moscow-based Bank Rossii, the central bank, said, The reserves rose $4.4 billion in the previous week.



U.S.Economy:

The Federal Reserve said that industrial production was down .7% in April, weaker than expected, after a .2% gain in March. The March Eurodollars are trading higher.

The U.S. Labor Department said that jobless claims were up 6,000 last week to 371,000, roughly as expected.

The Federal Reserve of Philadelphia's regional index of manufacturing improved from -24.9 to -15.6 in May, better than expected.

The Federal Reserve of New York's regional index of manufacturing fell from +.63 to -3.23 in May, weaker than expected.

Currencies update:

The U.K.'s Office for National Statistics said that housing starts totaled 32,100 units in the first quarter of 2008, down 24% from a year ago.

Japan's Cabinet Office said that core machinery orders were down 8.3% in March, weaker than expected.

The dollar fell against the yen as reports showed U.S. industrial production fell in April more than twice as much as forecast and New York manufacturing unexpectedly contracted this month.

The euro strengthened as Europe's economy grew more than expected in the first quarter, increasing the likelihood the European Central Bank will hold interest rates at a six-year high. Canada's dollar rose to near an eight-week high against the greenback as crude oil prices surged.

MCX Gold June

Technical Outlook:The daily stochastic have crossed over up which is a bullish indication. The stochastic 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 12196 levels. If market breaches 12196 may see prices to take further upside towards 12362 and 12569however if it holds back below 11823 may see prices to fall further on today. Major support is seen at 11616 and 11450

Recommendations–MCX Gold June: Buy at 11920 Target 11980 and 12050 Stoploss at 11870



MCX Silver July

Technical Outlook: The daily stochastic have crossed over up which is a bullish indication. The stochastic 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 23482 levels. If market breaches23482 may see prices to take further upside towards 23843 and 24167however if it holds back below 22797 may see prices to fall further on today. Major support is seen at 22473 and 22112

Recommendations-MCX Silver July: Buy at 22660 Target 22780 and 22850 Stop loss at 22520

MCXARTUN
9994500540

GENERAL MARKET CONDITIONS

China has warned of threats in its dams due to cracks in some the dams caused by earth quakes. As a result it has closed some of the hydro power plants. Chinese aluminum and zinc companies shut plants in the Sichuan province. If less power is available to factories in China then production will be less in all base metals and greater Chinese imports. Greater Chinese imports of base metals will result in lower LME stocks and a short term rise in them. Unless investment interest rises in base metals (which at the moment is not), spikes will be short lived. Copper is still a better bet for the low risk trader. Zinc and Aluminum should find short term investors on major dips.

Manufacturing in New York shrank after a decline in April industrial production while the reverse happened in the Eurozone and Japan as first quarter growth beat market expectations. The US dollar has so far ignored the weak US manufacturing sector. Markets will take note of the difference in manufacturing growth sooner than later and there could be short term weakness in the US dollar. But the cable will find sellers on any rise unless there is stability in UK housing sector. Next week is a very crucial week for the US dollar and if it fails to gain against the majors there will be temporary weakness in it.

Crude oil has managed to hold $120 and made a smart recovery thereafter. It’s just a consolidation phase for crude oil before the next move. Last time crude oil had a correction of $10 (from $120 to $110), this time the correction is even lower (from $126.98 to $120.75). Crude oil should break out from this range after the options expiry.

NYMEX CRUDE OIL -- FUTURE -- INTRA DAY PIVOT: $119.80

Crude oil has to fall below $120 or break $127.60 for direction.

MCXARUN
9994500540