Scrip
|
Rating
|
CMP
|
Stop loss
|
Target
|
Natural Gas
|
Buy (165---168)
|
172
|
159
|
183---188
|
Copper
|
Sell (302---304)
|
300
|
308
|
294-289
|
Energy
On Energy side, Natural gas futures rallied to a new
eight-month high on Thursday, after data showed that natural gas supplies in
storage in the U.S. rose less 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 June 3 rose by 65 billion cubic feet, below
forecasts for an increase of 78 billion. That compared with builds of 82
billion cubic feet in the prior week, 117 billion a year earlier and a
five-year average of 96 billion cubic feet. Total U.S. natural gas storage
stood at 2.972 trillion cubic feet, 22.2% higher than levels at this time a
year ago and 24.3% above the five-year average for this time of year. Unless
intense summer heat boosts demand from power plants, stockpiles will test
physical storage limits of 4.3 trillion cubic feet at the end of October. Meanwhile,
updated weather forecasting models continued to show above-normal temperatures
across most parts of the U.S. over the next two weeks. Demand for natural gas
tends to rise in the summer months as warmer temperatures increase the need for
gas-fired electricity to power air conditioning. Natural gas prices have
closely tracked weather forecasts in recent weeks, as traders try to gauge the
impact of shifting outlooks on early summer cooling demand. Gas use typically
hits a seasonal low with spring's mild temperatures, before warmer weather
increases demand for gas-fired electricity generation to power air
conditioning. On the other hand, Crude futures retreated from 11-month highs
taking a pause from the massive rally over the last several months, amid heavy
profit from speculators throughout global energy markets. Both the U.S. and
international benchmarks of crude have rallied approximately 90% from February
lows when they plunged to their lowest levels in a dozen years. Investors
continued to digest a bullish stockpile report from the prior session when the
U.S. Energy Information Administration (EIA) said U.S. Commercial crude oil
inventories decreased by 3.2 million barrels for the week ending on June 3. At
532.5 million barrels, U.S. crude oil inventories are still at historically
high levels for this time of year. Meanwhile, crude output nationwide increased
by 10,000 barrels per day to 8.745 million bpd last week, ending a four-month
streak of weekly declines. The slight increases provide some signs that U.S.
shale producers could be ready to return online as prices continue to creep
higher. Many analysts believe that shale companies need prices to exceed $60 a
barrel in order to maximize profits. Crude prices also faltered on Thursday in
the face of a broadly stronger dollar, which enjoyed its strongest one-day
rally in a week. The U.S. Dollar Index, which measures the strength of the
greenback versus a basket of six other major currencies, surged more than 0.50%
to an intraday high of 94.08. The index has still crashed by more than 5% since
early-December. Nigerian production halt of almost 1million barrel per day is
also supporting crude oil prices in international market.
Natural Gas
On seeing daily chart, Natural gas still looks
positive and any downside movement will be buying opportunity in it. Natural
gas has crucial support at 165---159 and resistance at 176. Weekly close above
176 will see sharp upside rally till 183---185+ mark in days to come. Fresh selling
can initiate only weekly close below 159 mark. Chances are bright for upside
move in Natural gas and could test 200 mark too in near terms as a weekly long
bullish candle indicate that positive momentum will remain continue for next
2-3 weeks. MACD and RSI too are positive zone along with it 21DEMA and 55DEMA
is at 154.50 and 144.80. Traders can buy and accumulate Natural gas in panic
around 168---165 with stop loss below 159 for the initial target of 183---188.
Crude Oil
Crude oil falls from its peak and has crucial support
at 3320. Three consecutive closes + weekly close below 3320 will see sharp
downside panic till 3180---3130 mark in days to come else it could test its
resistance level of 3380---3450 again. Further upside rally will see only
weekly close above 3450 mark. MACD and RSi are indication negative diversion on
daily chart while double top pattern too indicates that upper side seems
limited at this point of time but we will wait for clear direction. Traders can
trade with in and out strategy with levels only and wait for confirmation
Technical Call
Traders can buy and accumulate Natural Gas around
168---165 with stop loss below 159 on closing basis for the initial target of
183---188.
Technical Call
Base Metal
Zinc performed nicely in 2016 while we have seen
positive momentum in Lead, Nickel and Aluminium too but Copper still
underperforming. Base metals are supportive due to weakness in Dollar and
strong Chinese import demand. Zinc prices has surged as much as 25 percent in
2016 to the highest since July as miners supply less of the ore concentrate
that’s refined to produce the metal, just as demand rebounds in China, the
biggest user. It has emerged as the best performing metal this year. Prices for
the metal rose past Rs 139.80 per kg on June 9, their highest level in almost
10 months. This defies a slump in commodities from copper to iron ore and
nickel, which have continued to fall over the past month amid concerns about
growth in China. The Chinese smelters that churn out more than 40 percent of
the world’s zinc may cut production for the first time in four years because
they can’t get enough raw material, further lifting prices of one of this
year’s strongest-performing commodities. There are signs of tightness creeping
into the London refined zinc market, with cash metal commanding a small $2.00
per ton premium over three-month prices over the last couple of days. Last year
too, Investors have been drawn in by a narrative of mine closures and a
resulting tightening of the raw materials supply chain. There have been plenty
of false scarce in the market but this is the year that it really seems to be
happening.
Zinc
On seeing technical side, if we look at the peak of Rs
154 during May 2015 to low of Rs 96.65 per kg during Jan 2016, Zinc right now
is trading above 61.8 percent of retracement level around 138.00. Looking at
the recent up-move, Zinc may find difficult in the short term to sustain at
this high level and we may see correction till Rs 132---128 mark. This
correction is needed as most of the investors have not participated in this
rally. Since other metals were lagging, investors were reluctant to go long in
Zinc future. The chart indicates positive sentiment remain continue unless and
until it breach its support level of below Rs 125. If it breaches the support
level of 125 then trend reversal can come. 132---128 is ideal zone for buying.
Zinc has consolidated around this level plus this level is also 50 percent
retracement from current rally, taken from low of Rs 96.65 to low of Rs 139.80.
Zinc is shining star among base metals and looking at fundamental as well as
technical, it may continue to be so this year. For momentum, weekly close above
140 will see more upside rally in Zinc till 144---145.50+ mark in days to come
else it could test its support level of 135 and then to 132---128 mark and that
could be best buying opportunity in it.
Copper
Copper trend still looks weak and close below 298 will
see more downside panic till 294---289 mark. Traders can sell Copper on rise
around 302---304 with stop loss above 308 for the downside target of 294---289
while Nickel is trading in a range of 550---610. Chances are bright for upside
move in it but trade with levels only.
Technical Call
Traders can sell Copper around 302-304 with stop loss
above 308 on closing basis for the initial target of 294-289.
More will update soon!!
