Thursday, April 28, 2011

Tips For Mcx

High crude oil prices have affected demand with a lag of 9-10 months
We do not rule out a delayed impact of global crude demand due to high crude prices, we believe the same will be less pronounced as seen in the last correction, as: 
(1) we are in a upward economic cycle in a high liquidity regime; and 
(2) earlier demand correction was exacerbated by the financial/mortgage crisis, which is absent currently.

IEA last estimated the operable spare  apacity at 4.08 mbpd. Assuming the entire Libyan production off the market, the operable spare capacity falls to 2.68 mbpd. This is again higher than the low levels of spare capacity seen in CY08. Before the Libyan crisis, the country was producing 1.58 mbpd of crude.

Historically, crude demand growth has lagged price increases. As we see in the chart below, the demand fall in OECD economies lag price increases by as much as 9-10 months. 

We have chosen OECD economies, as these regions are developed and pricing of products are market linked, unlike in non-OECD economies. 

Following the Libyan crisis, all of the Libyan crude capacity (1.7% of global supply) has gone off the market. However, we feel the markets remain adequately supported with the crude spare capacity still higher than the sub-2.0 mbpd levels seen in CY08. 

To make our estimate more contemporary, we are, therefore, switching our benchmark to using Brent. Though the ideal benchmark would have been using Dubai crude, we use Brent crude oil as the same is traded and indicates interest of the trading community as well.

Assuming that the entire Libyan output is out of the market, OPEC spare capacity is expected to average 3.39 mbpd in CY11 and 2.46 mbpd in CY12. We believe that the crude market, which had recently spiked, has been pricing the possibility of the contagion effects of the crisis spreading to other countries, especially Saudi Arabia and Iran.

Moving to Brent as benchmark; expect Q1FY12 at USD 115/bbl
Until recently, we followed WTI crude as a benchmark. Recently, however, lower demand in the US market led to the land-locked WTI crude to get priced at a significant discount to other global benchmarks.

Monday, April 18, 2011

Mcx India Tips

Silver Tips : On a technical side.....6000 is a psychological support in coming trading sessions, however entered in over bought region.......almost 5000 point move in last week and last 15 days added more than 10000 points.

Today Crucial Level 62902 watch out......Below 62840 short term weakness, in case open with up side gap... avoid this level.

Technically, Silver touched a Life Time High on 15th April 2011 when it touched a high of $42.91. The sharp rise from $26.30 (on 28th January 2011) to $42.91 (On 15th April 2011) i.e. more than 50% rise in just 55 Trading Sessions can be attributed to tensions in Egypt, Libya, earth Quake & tsunami in Japan. Presently, Silver is extremely overbought and ripe for corrective decline. It may be noted that Silver has given bullish breakout from an otherwise bearish "Rising Wedge" pattern having resistance around $39.02.

This suggests that Silver can touch $44.5-45 in coming weeks. It may not be out of place to mention that Silver is at it's "LIFE TIME HIGH" after it touched $41.5 in 1980. Astrologically, Silver looks volatile this week. It may start with profit booking with possibility of Sharp decline on late 18th or 19th. Silver is expected to bounce back on late 18th/ 19th but Friday may again see some profit booking. (This is preliminary analysis. More accurate analysis with Buy/Sell recommendations will be provides to Commodity Subscribers during Market Hours) 

LEAD :  After the sharp move from 125 to 135, big sell off were saw and finally made a low is 117.75 and closed at 119.50... Short term correction is over and ready to move... Higher level resistance exit 123.50.
NICKEL (APRIL) :  As expected last week, it was face a resistance 1200-1210 range and big sell off were saw resulted it was made a low of 1151. Time being trading range is 1150-1200 range, on weakness to buy side and sell on selling with tight stop loss strategy to be adopted. 

ALUMINIUM  (APRIL) : Short term support at lower level.... We may consider lower level support is 116-116.50 range and decline to buy side... resistance 120.... Trading range 118---115 watch out please. 

NATURAL GAS (APRIL) :  Strong bounce from the lower level 178 and finally made a high of 190.30. Trend is bullish and decline to buy side... Fresh up move only above 191 if hold this level successfully.... Down side major support 175-180 range and major weakness only below that level.... Above 195 it will show real power.
CRUDE OIL (APRIL) : Over all trend is bullish but due to lesser tension of geographically and CEAS fire accepted by the Libiya resulted some soften in Crude price. We may consider support range 4700-4750 in near term and decline to buy side. 

Comex : Strong bull favour as remain hold $ 104 for target 120 mark.