MCX
+21.47
NCDEX
0
MARKET RECAP
The base metals staged a temporary bounce back on the back of coordinated rate cuts across the globe that bought in short-term positive sentiments. Markets reacted to this and base metals recovered from their multi-month lows on Thursday on the LME. This jump can be regarded as temporary because the news of rate cut pushed markets but the actual fact that global economies are in pain cannot be changed. Hence, the fundamental truth remains the same and rate cuts are just a way to remove panic from the markets. It cannot be a permanent solution to solve the global economic slowdown.
All base metals expect copper ended in the positive territory on the LME on Thursday. Copper inventories on the LME jumped 775 tonnes and this put pressure on the metal. Aluminum prices strongly held above the major support of $2,200. The other base metals recovered from their lows and ended in the green. However, base metals on the MCX on Thursday ended in red.
On the macroeconomic front, the US announced data on initial claims yesterday. This data suggested that fewer Americans filed for first-time applications for unemployment benefits last week as job losses related to the Gulf Coast hurricanes subsided.
OUTLOOK
The base metals market is expected to trade on a volatile note today as the short-term trend is bearish. The recovery that we saw recently is short-lived as overall global economic situation is weak. In the coming days we could witness fund liquidation as no policy announcements are capable to bring in immediate permanent effect. We recommend traders to remain cautious.
On the macroeconomic front, there is an emergency summit of the G20 nations this weekend which gives a likelihood of more coordinated policy announcements. This factor could also bring in some short-term relief to markets but we expect rallies to be attacked as the trend is bearish. Hence, every short-term rise will be followed by selling pressure.
Copper
Immediate support is seen at Rs.236.50 levels for MCX November contract. Further below, support is seen at 227.10 levels. Copper is expected to trade lower.
Whereas resistance is seen at Rs.248 levels & further upwards at Rs. 255.50.
Zinc
Immediate support is seen at Rs.67.50 levels for MCX Oct contract whereas crucial support is seen at Rs.66.10 levels. Zinc is expected to trade lower for the day.
Short-term resistance is seen at Rs71.05 whereas major resistance is seen at Rs 73.20.
Zinc prices are currently trading around 93 levels. Immediate support is seen at Rs 92.30 levels for MCX Feb contract whereas crucial support is seen 90.60 levels.
Short-term resistance is seen at Rs95.40 whereas major resistance is seen at Rs97.
Courtesy: Angel Commodities
