Stock2Watch

Stock2Watch at Open :- Indian shares are seen volatile today in the absence of strong cues from global markets, while investors are likely to watch new share offerings and listings. ** Motorcycle maker Hero Honda Moters Ltd, after its quarterly net profit rose 32% ** Tata Motors Ltd after its quarterly net profit fell 3% ** Mobile operator Reliance Communications Ltd, which plans to spend about $6 billion in the year to 2009 to expand its wireless network. **Optical storage maker Moser Baer India Ltd, after it reported net loss for the December quarter from a profit a year ago. ** Steel and real estate firm Shree Precoated Steel Ltd, after its board approved splitting each share into five and spinning of its steel business.

OUT LOOK

April gold posted an inside day with a higher close on Thursday as it consolidates above the previous reaction high crossing at
922.50. The high-range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI are overbought
but remain neutral to bullish signaling that additional gains are possible near-term. If March extends this winter's rally, monthly
resistance crossing at 950.00 is the next upside target. Closes below the 20-day moving average crossing at 900.60 would
confirm that a short-term top has been posted. First resistance is Wednesday's high crossing at 942.20 then monthly resistance
crossing at 950.00. First support is the 10-day moving average crossing at 910.60 then the 20-day moving average crossing at
900.60.

March silver closed higher on Friday as it extended this week's rally above the previous reaction high crossing at 16.715. The
high-range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI are overbought but remain
neutral to bullish signaling that sideways to higher prices are possible near-term. If March extends the rally off December's low,
weekly resistance crossing at 17.500 is the next upside target. Closes below the 20-day moving average crossing at 16.180 are
needed to confirm that a short-term top has been posted. First resistance is today's high crossing at 17.090 then month
resistance crossing at 17.500. First support is the 10-day moving average crossing at 16.443 then the 20-day moving average
crossing at 16.180.

March copper closed higher on Thursday as it extended Tuesday's rally above the 20-day moving average. 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. If March extends this week's rally, the reaction high crossing at 336.00 is the next upside target.
First resistance is today's high crossing at 332.25. Second resistance is the reaction high crossing at 336.00. First support is
today's low crossing at 319.90. Second support is Monday's low crossing at 311.65.

March crude oil closed lower on Thursday as it consolidated some of the rally off last week's low. The high-range close sets the
stage for a steady to higher opening on Friday. Stochastics and the RSI remain bullish signaling that sideways to higher prices
are possible near-term. Closes above the 20-day moving average crossing at 92.32 are needed to confirm that a short-term low
has been posted. If March renews this month's decline, December's low crossing at 85.37 is the next downside target. First
resistance is the 20-day moving average crossing at 92.32. Second resistance is Wednesday's high crossing at 92.71. First
support is the 10-day moving average crossing at 90.22. Second support is Monday's low crossing at 88.78.

March Henry natural gas closed higher on Thursday as it extends this week's breakout above the 20-day moving average
crossing at 7.966. 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 the rally off last week's low,
this month's high crossing at 8.397 is the next upside target. Closes below last week's low crossing at 7.534 would renew the
decline off this month's high. First resistance is today's high crossing at 8.130 then this month's high crossing at 8.397. First
support is Tuesday's low crossing at 7.848. Second support is last week's low crossing at 7.534.

MCXARUN
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GENERAL MARKET CONDITIONS

For once silver, copper and other base metals outperformed yesterday on expectations that the Fed interest rate cut will result in continued higher investment demand apart from lingering production issues from China. Technically the picture in zinc, lead and copper is fairly bullish and if they close higher today one should expect eight percent to ten percent gains in these metals next week. In base metals there are still short positions which are yet to be covered and if they continue to rise some of the short positions will get converted into long positions and further boost to the prices. Today’s close is very important for all the base metals.

The only risk for lower gold prices is that of stronger than expected US January payrolls over 150,000 which could result in expectations that the Fed may not cut interest rates in March. Gold is firm and will continue to find buyers on dips unless there is a technical breakdown. Silver has finally started firing and hopefully February should be the beginning of the bull run and silver gets its due. Crude will track the US dollar.

SILVER -- MARCH FUTURE -- INTRA DAY PIVOT $1692.0

Silver should target $1712 and 1760 as long as $1682 holds. A fall below $1682 will result in $1652 and $1612.0

NYMEX CRUDE OIL -- FUTURE -- INTRA DAY PIVOT: $89.54

In the short term as long as crude oil holds $85 it will target $95 and $102+. Crude oil has to fall below $85 for further gains.

MCXARUN
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energy

MCX Crude oil Feb rose to high of Rs. 3608 per barrel and traded with reasonable gains following trend from Gold and equity market. MCX Natural gas was trading with loss of Rs.3 at Rs. 311.50

· Crude oil rose for a fourth day on speculation the U.S. Federal Reserve will cut interest rates to spur economic growth in the world's largest energy user and as OPEC prepares to keep output on hold.

· The threat of tumbling stock and home values and a weakening labor market will spur the Fed to cut its benchmark rate by half a percentage point tomorrow, traders and economists forecast. The Organization of Petroleum Exporting Countries is unlikely to change its output when it meets Feb. 1 in Vienna

· Some OPEC members, including Iran's Governor Hossein Kazempour Ardebili, have said the group is unlikely to raise output because there are sufficient supplies in the market and signs of a global economic slowdown mean demand may fall.

· U.S. economic growth probably slowed to 1.2 percent in the fourth quarter as high fuel costs and rising unemployment limited consumer spending, according to a survey of economists. Asian stocks fell for the first time in four days after Goldman Sachs Group Inc. said the Japanese economy has probably fallen into a recession.

· While temperatures are expected to be warm earlier this week, forecasts released Friday called for colder weather during the 6-to 10-day period in the U.S. Northeast and Midwest which could give a boost to heating demand. According to forecast by AccuWeather.com, as reported by Dow Jones newswires, temperatures are expected to drop into the single digits in New York this weekend and remain in the teens and 20s Fahrenheit during the first week of February.

MCX Crude Oil Feb (Daily Chart)



Technical Outlook:

Momentum studies are bearish but are now at oversold levels and will tend to support reversal action if it occurs. 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 moving average. The upside closing price reversal on the daily chart is somewhat positive.

Recommendations:

MCX Crude Oil Feb: Buy at 3560-3570 for the target of 3660 and 3695 with stop loss at 3520



MCX Natural gas Feb (Daily Chart)



Technical Outlook:

Momentum studies are still 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 Natural Gas Feb:

sell @ 313/314 stoploss 318 tgt-310-307-304

MCXARUN
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Bullion

Gold rose to record highs in London, Comex and MCX as power cuts continued in South Africa, affecting the mine production in the world's second-biggest miner of the metal. Silver jumped to the highest since 1980.

· MCX Gold April traded towards the high of Rs. 11861 per 10 grams gave a small intra day correction towards days low of Rs. 11721 per 10 grams, but finally closed with gains. Similarly MCX Silver March registered days high at Rs. 21599 per kg and corrected towards days low of Rs. 21254 closed with gains.

· International spot gold traded positive to register day’s high at $933.10 per toz and silver at $16.82 per toz.

· Anglo Platinum Ltd. and Gold Fields Ltd. shut operations in South Africa for a fifth day because of a shortfall in power supply. The country produces more than a 10th of the world's gold and over three-quarters of its platinum. Gold also climbed on speculation the Federal Reserve will cut interest rates tomorrow, pushing the dollar lower and boosting gold's appeal as an alternative to U.S. assets.

· Interest-rate futures indicate a 74 percent chance the Fed will reduce its benchmark interest rate to 3 percent, compared with 86 percent yesterday, after a report showed orders for durable goods rose last month. The Fed last week cut the rate to 3.5 percent in an emergency move to head off a recession.

· Gold production inIndia in the first nine months of this financial year totalled 9.369 tons, up from 9.058 tons from a year earlier, according to the latest government data.

· Apparent long liquidation pared the fund's net long position in Comex gold futures and options combined as of Tuesday, according to the latest CFTC data. The large non-commercial accounts were net long 217,961, down from 224,528 the prior period.

Indian Bullion Spot Market

Precious metals received a lift in spot markets on upbeat equity markets, supply disruptions at South African mines due to power failure as well as expectations of yet another interest rate cut by the Federal Reserve.

· In Mumbai markets, gold (995) and gold (999) advanced by Rs135 to finish at Rs11,845/10gm and Rs.11,895/10g. Arrivals in gold were at 150 kilos. Silver (.999) closed at Rs.20,880/kg, rising by Rs.200. Arrivals were in silver were at 50 kilos.

· Chennai gold (995) escalated by Rs175 to finish at Rs11,875/10gm and gold (999) by Rs125 to close at Rs11,925/10gm respectively whereas Silver (.999) closed at Rs20,750/kg, rising by Rs300.

· Jaipur gold standard closed at Rs.12,000/10gm, advancing by Rs.200 whereas Silver (.999) closed at Rs21,000/kg, rising by Rs100.

· Ahmedabad gold (995) rose by Rs150 to close at Rs.11,850/10gm and gold (999) by Rs150 to close at Rs11,900/10gm whereas Silver (.999) escalated by Rs250 to close at Rs21,150/kg.

· In Delhi bullion markets, gold (995) increased by Rs80 to close at Rs.11,830/10gm and gold (999) by Rs90 to close at Rs.11,890/10gm whereas Silver (.999) zoomed up by Rs210 to end at Rs.20,750/kg.

MCX Gold Apr (Daily Chart)



Technical Outlook:

Momentum studies are bullish now 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 only above 11760-750 for the target of 11890 and 11940 with stop loss at 11715

MCX Silver Mar (Daily Chart)



Technical Outlook:

Momentum studies are still bullish now 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 21380-400 for the target of 21560 and 21670 with stop loss at 21180


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bullion chart

this is MCX gold day chart
click the chart to view large



this is MCX silver day chart
click the chart to view large



MCXARUN
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GENERAL MARKET CONDITIONS

The IMF has reduced its global growth target for 2008 to 4.1% from 4.9% yesterday. The IMF has lowered China’s 2008 growth forecast to 10% from previously 11.40%. China is the biggest guzzler of base metals. The current base metals prices to a certain extent reflect slowdown in global growth. However if actual results come in lower than expected then expect another phase of hammering by the bears in base metals. Lower global growth in 2008 accompanied by higher prices of essential commodities implies greater investment interest in precious metals and soft commodities and less investment in equities. Gold will continue to rise with very high volatility.

Copper and other base metals shot up on expectations that Fed interest rate cuts will prevent the US economy from slowing down. Base metals have risen partly due to short covering and some long position building ahead of the Fed cut. Expect more gains in base metals today.

Traders prefer to go long in gold, silver and crude oil while they are going short on the US dollar before the Fed meeting. Apart from the 0.25%/0.50% interest rate cut, traders have started betting in the options markets on what will be the Fed funds rate towards the close of the year whether it will be 2.25% or 1.25%. After this week most of the interest rate sensitive risk will be over. It will be another volatile day, but gold and silver will find support at lower levels.

COPPER -- MARCH FUTURE -- INTRA DAY PIVOT: $327.0

Only a break of $338 will result in $347 and $360 in the short term. Initial support at $328.60

NYMEX CRUDE OIL -- FUTURE -- INTRA DAY PIVOT: $89.24

A break of $93.20 will result in $95 and more. On the lower side as long as $90.20 holds downside will be limited.

MCXARUN
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