Base Metals In the coming week we might see overall trading participation to remain lower than normal as the Holiday mood continues in and around New Year. On the economic data front, we have the pending home sales reading on Monday which as per Bloomberg expectations is seen rising by 1% after dropping by 0.6% last month. However, the pending home sale which has been continuously falling for last five months has a chance for negative surprise. Housing sales has been falling amidst increasing mortgage rates and also raise in house prices due to low inventory. Another number on the same segment is the S&P/Case Shiller Home Price which is expected to show extended increase in house prices. Nevertheless, despite these readings markets may witness dullness ahead of the year end celebrations. Overall as per the economic cues are concerned, most of the data pertaining to base metals could continue to support the base metals during the coming week. Gains however might be limited due to lower than normal participation in the markets. There are other economic data from Europe and Asia as well.
Coming to the commodity trading specific updates, we maintain a cautious to moderately bearish outlook on nickel as there have been no developments in Indonesia regarding the release of the draft policy on ore export ban. Even though the prices of the commodity rallied since last three weeks, concerns of higher inventories and prevailing supply surplus in the commodity still remains. We continue to maintain our positive outlook on lead on the back of anticipated demand from the western countries due to cold weather which requires frequent replacement of the batteries and demand deficit situation in the commodity. We recommend buying Zinc from the lower levels during the week on the back of tightening supply in the commodity where in the inventories have been declining since last 39 trading session. In the coming weeks both Lead and Zinc prices at the MCX platform might adjust with the LME prices and advice the traders to exercise caution while taking buying positions. Copper might get support from the positive set of manufacturing and housing sector related data indicating a strong recovery in the US economy there by indicating that the demand for the metal from the world`s largest economy. Overall we have a mixed view on the base metals for the coming week and recommend buying select base metals like Copper, Lead and Zinc and recommend selling nickel.
Cardamom Prices opened almost up and traded sideways in a tight range. However it starts improving during later part of the week with sharp jump towards its weekend. It marked the days high but unable to sustain at higher levels towards INR 697.10 and decline marginally amid long liquidation and finally closes with the formation of short filled candle indicating almost sideways price movement. OI continue to decline but volume stay at higher levels hinting short covering at lower levels. Moreover clear indication is still lacking from OI and volume front to decide the immediate trend. It is continue to extend its previous couple of weeks trend and any jump towards is resistance might face stiff resistance towards its falling channel line. However it got strong support near INR 570 where is likely to get a technical bounce towards its resistance near INR 715. Prices already trading below 20 and 50 day EMA at INR 707 and 771 were signaling short term weakness. The 14-day RSI is curving down while stochastic (9, 3, 3) is continue to decline in neutral region indicating sideways movement. Prices are likely to trade sideways with weak bias during coming weeks.
Major Resistance Weekly on Upside at 715-760
Major Support Weekly on Downside at 630-570
Trend Deciding Weekly Level at 680
Turmeric Prices opened steady and remain in a narrow range with flat and initial weakness during the week under review. It almost forms an inside day trading pattern with bearish doji pattern with possibility of trend reversal in days to come. However, it might test its falling trend line and any two closes below the same shall turn the sentiments negative. The prices are likely to trade in the range of INR 6070-6653 during the week. OI decline significantly at higher levels indicating profit booking which results into sharp decline in prices from its high. Any major decline might find support towards its EMA zone from where it may again likely to get a technical bounce. On the upper side, INR 6653 to 6820 is the resistance zone. The 14-day RSI surged and moving away from its MA While stochastic (9, 3, 3) is continue to stay flat in neutral region indicating sideways movement during coming couple of weeks.
Concisely prices are likely to trade sideways during coming couple of days.
Major Resistance Weekly on Upside at 6653-6820
Major Support Weekly on Downside at 6070-5692
Trend Deciding Weekly Level at 6320
Jeera Prices opened weak and witness weak trade during the week. Later on the prices tumble as it breached its crucial support of INR 12600 and continue to decline during the week. It tried to fetch its immediate resistance but fails to sustain above the same and got good selling pressure from its higher levels. Finally it forms a long filled candlestick hinting bearish momentum is likely to continue. It is in continuation of the previous weak trend and enters into a rectangle of previous consolidative phase. It is likely to test its support towards INR 12180 where it might find trend line support. Any jump might face stiff resistance towards INR 12942 and breaching the same shall turn the sentiments positive. OI improved significantly while volume decline in continuous chart. Moreover, there is no clear indication from OI front to decide the market direction as of now. Prices already trading below 20 and 50 day EMA at INR 12813 and 13150 was signaling short term weakness. The 14 day RSI and Stochastic (9,3,3) is moving down which might keep the trade sideways in short term. MACD is trading in negative territory showing some bearish movement in coming weeks. Considering the above factors price is likely to trade sideways in near term.
Major Resistance Weekly on Upside at 12942-13270
Major Support Weekly on Downside at 12180-11890
Trend Deciding Weekly Level at 12535
Sugar Prices open steady and traded sideways for a while but unable to hold higher levels and decline during later part of the weeks and witness inside week trading pattern. Later on the price’ closes with the formation of bullish candlestick hinting trend strength in days to come. OI improved significantly while volume decline in continuous chart. Moreover, there is no clear indication from OI front to decide the market direction as of now. However any fresh building of OI with high volume and trending market might cite some indication for initiation of the new rally moving forward. The 14-day RSI and stochastic (9, 3, 3) is moving flat with marginal weakness indicates sideways trade. More or less prices might trade in the range of INR 2751 and 2848 and any two consecutive closes below or above the same shall direct futures trend for short term. Concisely prices are likely to trade sideways during coming couple of days.
Major Resistance Weekly on Upside at 2848-2895
Major Support Weekly on Downside at 2751-2689
Trend Deciding Weekly Level at 2801
Commodity Trading Tips
BUY COPPER MCX FEB ON DISP NEAR 464 SL 456 TGT 470
BUY LEAD MCX JAN ON DIPS NEAR 138.50 SL 134.50 TGT 142.50
SELL SUGAR NCDEX JAN AROUND 2830 SL 2848 TGT 2785-2860
SELL CARDAMOM NCDEX JAN NEAR 715 SL 760 TGT 65-635
SELL TURMEIC NCDEX APRIL AROUND 6490 SL 6653 TGT 6120-5970
SELL JEERA NCDEX MARCH NEAR 12750 SL 12942 TGT 12400-12250