MCX Zinc market under short covering; Support seen at 163.3
Commodity Online | November 08 2016
UPDATED 10:27:40 IST

NCDEX Chana under long liquidation; Support seen at 4100

MCX Mentha Oil likely to move in a range of 978.4-1005.4

MCX Cotton under short covering; Support seen at 15870

MCX Aluminium may trade between 136-137.8 levels

NCDEX Jeera under short covering; Resistance seen at 13820

Zinc settled up by 1.07% at 164.8 due to expected supply deficits in the market. Markets are attempting to strike a balance between a Clinton win and the possibility of a sell-off in commodities if Trump is elected. Sentiment was mixed on whether the hours leading up to the U.S. election on Nov. 8 will spur or subdue trading activity. China’s purchasing-managers index of activity at factories rose to a two-year high, data from the National Bureau of Statistics showed, suggesting the economy’s stabilization continued into the fourth quarter as robust consumption underpins demand.

The three-month zinc price remains around five year highs – it was recently at $2,481 per tonne, an increase of $33. Stocks and cancelled warrants were both 300 tonnes lower at 449,050 tonnes and 62,000 tonnes respectively. Glencore third quarter zinc production rose 13 percent from the previous quarter, the first time quarterly output has increased since the group announced sweeping mine suspensions to boost prices, a production report showed.

Some metal investors have worried that the reversal of Glencore's output cuts would dampen a rally in zinc, the top performer among base metals with gains of over 50 percent so far this year. Investors have piled into the market on expectations of severe shortages emerging due to the Glencore suspensions as well as major mines such as Century in Australia running out of ore and closing down.

Technically market is under short covering as market has witnessed drop in open interest by -2.28% to settled at 13366 while prices up 1.75 rupee, now Zinc is getting support at 163.3 and below same could see a test of 161.8 level, and resistance is now likely to be seen at 166.5, a move above could see prices testing 168.2.

Trading Ideas:
--Zinc trading range for the day is 161.8-168.2.
--Zinc prices ended with gains due to expected supply deficits in the market.
--LME stocks and cancelled warrants were both 300 tonnes lower at 449,050 tonnes and 62,000 tonnes respectively.
--Glencore's production data showed, zinc production from its own sources rose to 282,700 tonnes in the third quarter.

Courtesy: Kedia Commodities