Last month recommendations overview
Last month we released report on Soyabean and Natural Gas.
Our sell call in Soyabean proven great and made a low of 3030 with a handsome
return of more than 10%. We recommended selling in Soyabean below 3400 for the
downside target of 3050. Soyabean is now trading around 3150. Good amount of
rain fall in Malwa region gives life support to edible oil and increase in
production estimates too in this year until and unless there is any major
change in fundamentals.
Soyabean has support at 3030 and resistance at 3180.
Two consecutive closes above 3180 will see dead cat bounce till 3235---3280 and
then to 3400 mark in days to come else it could test its support level of
3080---3030 again. Further panic seen only close below 3030 mark. Now we will
expect Soyabean to trade in a range of 3000---3400 for this expiry while
Soyaref has support at 560---548 and resistance at 572. Looks positive and
could test its resistance level of 572. Weekly close above 572 will see further
upside rally till 583---588+ mark in days to come. Fresh selling can initiate
only close below 548 mark. We will expect trading range of 548---588 for the
month of August to October.
Our 2nd pick was Natural gas. We recommended buying in
Natural gas around 178---173. It made a low of 172.60 and bounced back sharply
to 191.30 but unable to sustain and slipped again to 182 mark. Natural gas
futures plunged after data showed that U.S. natural gas supplies rose more than
expected last week. The U.S. Energy Information Administration said in its
weekly report that Natural gas storage in the U.S. in the week ended August 7
rose by 65 billion cubic feet, above expectations for an increase of 55 billion
and following a build of 32 billion cubic feet in the preceding week. Supplies
rose by 79 billion cubic feet in the same week last year, while the five-year
average change is an increase of 48 billion cubic feet. Total U.S. natural gas
storage stood at 2.977 trillion cubic feet as of last week. Stocks were 521
billion cubic feet higher than last year at this time and 81 billion cubic feet
above the five-year average of 2.896 trillion cubic feet for this time of year.
Updated weather forecasting models pointed to warmer-than-normal temperatures
across many regions, including the east, central and southern U.S., after
August 20 and until the end of the month, boosting late-summer cooling demand
for the fuel. Forecasts originally called for mostly average summer
temperatures during the period. Demand for natural gas tends to fluctuate in
the summer based on hot weather and air conditioning use. Natural gas accounts
for about a quarter of U.S. electricity generation. Overall trend still looks
positive in Natural gas and we will maintain buy rating with stop loss of 163
on closing basis for the immediate target of 220. Fresh selling can initiate
only close below 163 mark.
Monthly Pick- Turmeric
Turmeric bounced back sharply from lower levels and closed
September at 7498. It made a low of 6612 and bounced back sharply amid less
rainfall in southern part of India. According to market times news that sowing
of Turmeric is less in the period of 2015 of 39000 hectare area as compare to
2014 of 43000 hectare area while average sowing in this period about 50000
hectare area. Sowing is below average and this leads to support in Turmeric
prices in near terms. On the other hand less rain fall in southern part of
India is also worrisome for the crop while export demand is continuously rising
for better quality of Turmeric. In the period of 2014-2015, export of Turmeric
is around 86000 tons which is up by almost 8500 tons while spice board of India
estimates export demand target of 80000 tons for the fiscal year 2014-2015. As
on 16thAugust 2015, total stock for turmeric on NCDEX division around 13422
tons which is less in compare to last year
Technically, TMC has support at 7000---6500 and resistance
at 8100. It looks positive and could test its resistance level of 8100. Three
consecutive closes + weekly close above 8100 will see sharp upside rally in
Turmeric till 8800---9300+ mark in days to come. Channel line breakout above
8100 with volume will see nonstop rally till 10000---11000 mark in coming
weeks. Fresh selling can initiate only weekly close below 6500 mark. Turmeric
is forming falling edge pattern on daily chart along with it MACD and RSI too
indicates positivity in Turmeric. On seeing fundamental and technical view, we
will expect turmeric to trade with positive bias and downside target seems
limited or we can say that unlikely to breach its support level of 6500. Any
sharp panic will be buying opportunity for positional traders around
7300---7000 with stop loss of 6500 on closing basis for the initial target of
8100+ mark.
Recommendation
Buy Turmeric in panic around 7300---7000 with stop loss of
6500 for the initial target of 8100.
Monthly Pick- Aluminium
Aluminum prices have been fairly subdued this year. London
Metal Exchange (LME) aluminum prices have averaged roughly $1,800 per ton so
far this year, as compared to roughly $1,900 per ton in 2014. Aluminum has
diverse applications in industry. It is an important input in the packaging,
aerospace, automotive, construction, commercial transportation, power
generation, capital goods, and consumer durables industries. Thus, demand for
aluminum is broadly correlated with industrial growth. Economic weakness in Europe
and slowing Chinese growth have contributed to the weakness in aluminum demand,
and consequently prices, over the last few quarters. China, the world’s
largest consumer of aluminum, is expected to witness a slowdown in GDP growth
to 6.8% and 6.3% in 2015 and 2016 respectively, from 7.4% in 2014. On the
supply side, production capacity has not been reduced corresponding to the
weakness in demand over the last few quarters. Persistently high aluminum
inventory levels relative to demand have kept LME aluminum prices depressed.
On MCX division, we have seen panic selling in Aluminium
prices from 110.00---99.70 in recent weeks while is has been falling
continuously from 125.00 level and now trading around 101.00. Technically,
Aluminium has support at 99.50 and resistance at 103.00---104.50. It looks weak
and could test its support level of 99.50. Two consecutive closes below 99.50
will see further panic in Aluminium till 96.00---93.00and then to 89.00 mark in
days to come. Fresh buying can initiate only close above 104.50 mark. RSI and
MACD still indicate negativity on charts and we will expect pressure to remain
continue in Aluminium. With seeing technical and fundamental, chances are
bright for downside move in Aluminium as upper side target seems limited.
Traders can sell Aluminium on rise around 102.00 with stop loss above 104.50 on
closing basis for the initial target of 99.50 and then to 96.00---93.00.
Recommendation
Sell Aluminium around 102 with stop loss of 104.50 for the
downside target of 99.50---96.00---93.00
Trade with levels only!!
