Daily Market Analysis

Exciting Day Ahead!

We may term this as super Thursday as events planned today can make a dead man walking ! Meanwhile China reported their Exports and Imports Figures which came in at 8.7 % and 14.8 % against expectations of 7.0% and 8.5 % .Trade Balance however has shown negative growth with figures coming in at 40.81B against expectations of 46.32B. Japan GDP Numbers were below expectations with a growth of 0.3 % against 0.5 % in the last quarter. Today’s moves may be in Tandem with heavy news flow expected during the day. However the real effect may take place tomorrow as results are expected to be announced after the market closes. Comey in a written statement has mentioned that Trump suggested him to back off from investigation into Flynn’s alleged relationship with Russia but has almost absolved the President of any wrong doing.This can turn serious and we need to carefully look at his live testimony today. Crude has been in the news as Inventory rise has led to massive sell off though for me it looks a bit over done. The biggest worry for me is the production cut agreed upon by Opec countries which could lay in tatters as the middle east tensions has the potential to disrupt that agreement. This has really spooked the crude bulls. The present environment certainly seems conducive for Gold to make inroads on the higher side . On the flip side it’s failure to cross $ 1300 puts a little bit of doubt in our mind. Dollar index is having a torrid time and now looks to be in oversold territory.Re bar has made some positive strides and is up 2 % at the time of writing today.

Copper has shown some positive intent with buyer’s waiting to lap up the material at lower levels. Technically a good close and strong price action. Grasberg mines have suspended 3000 wage contracts yesterday. Chile is another country facing supply bottlenecks as inclement weather has suspended production in two of the biggest mines for now . This could potentially be dangerous for the bears if it persists. On the flip side according to trade experts China concentrates of Copper ore is amply available and there is little chance of a shortfall in the short run even if supply is constrained. Inventory has seen constant declines. Spreads sees two way action in the counter. A close above 5725 will be very positive for the metal in the medium term.

Support 1 – 5650 ( will provide support to the material )
Resistance 1 – 5720-5725 ( remain strong resistance zone and very congested )
Support 2 – 5600 ( a close around this level could spell doom for the metal )
Resistance 2 – 5742 ( basis 10 April’17 low )

Zinc has been the bunny in this metal rally. It is a rare situation in the last one and a half years . Strong seller’s aggression seen in the counter with a technically poor close. However the fundamentals remain intact though charts have been inflicted with major damage and a close above 2520 could spell some short covering. Momentum for now certainly in favor of the bears but we know how quickly things can change. Open interest has seen length reduction though in very small quantities. For now as reiterated earlier it has found a floor at 2427.5 and it will be interesting to see if it can support this level. Price action mildly positive today in morning trades.

Support 1 – 2458 ( basis 06 June’17 low )
Resistance 1 – 2500 ( psychologically and technically important )
Support 2 – 2425.5 ( basis 09 Nov’16 low )
Resistance 2 – 2515-2520 ( remain strong zone in the mid term )

Lead has lagged the broader market conditions along with zinc after it’s continuous failures to cross 2130. Seller’s aggression was evident with a poor technical close. It has been bid up in the morning session and made a new high but the more important level of 2100 will be keenly watched. Spreads are on the offered side . Inventory has been positive with decent declines. Open interest is on a rising trend indicative of fresh longs ? A close above 2120 will bode very well for the counter.

Support 1 – 2065.5 ( Tuesday’s low )
Resistance 1 – 2100 ( remain psychologically and technically important )
Support 2 – 2043.5 ( basis 18 May’17 low and divergence seen from here )
Resistance 2 – 2121.5 ( basis 05 June’17 high )

Aluminum had a positive price action with passive buying seen in the counter. The most important thing has been it’s ability to defend 1900 and strong buying seen below this level. Spreads have been bid for. Inventory has been declining for many months now. Open interest has been reducing indicative of short covering at lower levels ? Prices need to close above 1936 to be able to attract fresh money in the counter. A close below 1900 will attract selling in it’s nascent price recovery.

Support 1 – 1909 ( basis 31 May’17 low and strong resistance )
Resistance 1 – 1936 ( represents short term resistance zone )
Support 2 – 1900 ( technically and psychologically strong support )
Resistance 2 – 1944 ( basis 01 June ’17 high )

Nickel has been net seller and our previous assumption that it will be difficult for the counter to cross 9000 holds for now. Price action is certainly poor and it has been one of the many false starts we are so accustomed to in the metal. Inventory has seen declines. Open interest has declined considerably. Spreads are again well offered . A close below 8700 will open up the counter for 8500. On the upside 9000 will haunt the metal in the medium term.

Support 1 – 8790 ( basis 16 June’16 low )
Resistance 1 – 8940 ( basis 05 June’17 high )
Support 2 – 8705 ( basis 07 June ’16 high )
Resistance 2 – 9000 ( don’t think the metal can reach that level and break the shackles ! )

The vagaries of tin is difficult to understand as the price movements are looking certainly exaggerated . The most difficult and concerning thing is the high volumes that it is cloaking in the last two days.Price action has been very negative . Technically a weak close with recent support levels all broken.Inventory has seen small uptick after many months of declines , stocks reaching multi year lows. A close below 19300 will be negative for the counter in the short run and on the upside it needs to topple 19550 .

Support 1 – 19215 ( basis 13 March’17 low )
Resistance 1 – 19450 ( basis 10 March’17 high )
Support 2 – 19100 ( basis 09 March’17 low )
Resistance 2 – 19550 ( Today’s high )

On the macro economic parameter Euro zone GDP came in at 0.6 % against expectations of 0.5 %.Later in the day in US we have Initial and Continuous Jobless Claims and Bloomberg Consumer Confidence. Our hands are full in terms of Macro’s Today and we will have to evaluate each events carefully before taking the plunge as both the news have the ability to change the direction of the markets. However if past history is to be considered than every big event has been followed by a strong bout of buying irrespective of the outcome ! All the markets will certainly hoping for the much needed correction.Till than let’s keep our fingers crossed !