Daily Market Analysis

Reduced Majority For May As UK Vote Count Ends

Things are getting to a point where exaggerated movements could take place in the metal space and I have a feeling that the immediate bottom is in place for Zinc and Lead. Copper has certainly broken major levels and look good for many more in coming days. Comey has almost absolved Trump of any misdeed but also stated that he wanted National Security adviser to be absolved of any charges. Conflicting statements but largely in favor of Trump . UK has seen a hung parliament but with a very marginal number.This has certainly brought to the focus their exit plans from Europe which is positive for the commodities in general as perception of people change in the aftermath of the referendum held last year. As reiterated earlier the failure of Gold to break past the $ 1300 levels has resulted in large scale selling in the counter and with relative calm again prevailing in the US and UK , sellers once again have been a dominant force. Re bar has bounced from a technical low and is up almost 2 % today. The big disappointment has been the price movements of Crude oil which has been the major loser of this rally as Middle East tensions increase. We will be closely watching $ 45 levels and this could potentially support the prices . Failure of oil to defend $ 45 cold lead to deeper cuts in prices. Today Trump is going to have a press meet and with him around we can have another spark in the markets.

Copper has broken mid term resistance levels and strong buyer’s aggression seen in the metal. This kind of price flow was seen late last year in Copper and if it sustains than we could see some lofty levels in recent times. Inventory has been positive for the counter. Spreads have seen strong bids in the metal. Codelco Copper mine has started normal operations after a brief spell of suspension of work due to bad weather in Chile. We certainly expect further announcements from other mines as well.Inventory has seen an uptick in withdrawals helping it’s rise. A close above 5820 will bode well for the counter.

Support 1 – 5720 ( will act as strong support for the counter )
Resistance 1 – 5810 ( basis 10 Feb’17 low )
Support 2 – 5700 ( technically important )
Resistance 2 – 5838.5 ( basis 23 Feb’17 low )

Zinc has been the under dog of the metal space though small passive buying was evident in the counter. Inventory has been supportive although price action has been weak and it has failed to recapture 2500 for now. Despite some lofty levels from Copper it has failed to rise to the occasion.Yesterday’s high has been yet to be visited till the time of writing. Spreads remain well offered . Technically it needs to close above 2520 for buyer’s to re emerge in the counter. On the downside a close below 2450 could make the counter test 2427.5 again . For me it is buy at dips with a strict stop loss.

Support 1 – 2458 ( basis 06 June’17 low )
Resistance 1 – 2517 ( basis 18 April’17 low )
Support 2 – 2425.5 ( basis 09 Nov’16 low )
Resistance 2 – 2549 ( basis 22 Dec’16 low )

Lead has been sold into as it struggles to scale 2100. Price action poor with seller’s aggression seen in the counter. Inventory has seen a rise. Open interest has been continuously rising ,indicative of short’s covering ? We will definitely not jump the gun and as of now wait for the counter to break higher levels technically before jumping the gun. A close above 2130 will bode well for the counter and on the downside a close below 2070 will attract further selling in the metal.

Support 1 – 2070 ( Congested zone and first area of support )
Resistance 1 – 2100 ( the metal is struggling to get past this level )
Support 2 – 2043.5 ( basis 18 May’17 low and divergence seen )
Resistance 2 – 2130 ( very strong mid term resistance )

Aluminium has seen strong seller’s aggression in the counter . Price action very negative with weak technical close. Selling in the counter in the morning session has been very strong and a failure of the metal to protect 1885-1890 would make us re visit 1865 area. Spreads have been net buyers. A close above 1910 will attract buying in the counter but for now it looks a wishful thinking.I would be a seller at every rise with a stop loss of 1910.

Support 1 – 1887 ( basis 06 June’17 low )
Resistance 1 – 1909 ( basis 31 May’17 low and strong resistance )
Support 2 – 1871.5 ( basis 12 May’17 low )
Resistance 2 – 1917.5 ( basis 17 June’17 high )

Nickel has been a laggard since long and it is better to sell this counter at every rise. The failure of the metal and it’s inability to cross 9000 makes me wry for a deeper cut in this metal. Inventory has seen declines. Spreads have been net sellers. Technically a poor close as usual and it has become repetitive in nature. It is better to avoid this counter till it can break some technical levels and till that time we remain net sellers. Open interest is reducing in nature.

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 ( remain a very strong technical level and very unlikely that the counter will challenge this )

Tin had a negative price action backed by high volumes . Today in the morning session stops were triggered as it broke past 18800 levels.From 18660 the prices recovered to 19100 levels which was marked by low volumes. Spreads have seen buyers. A close above 19200 will bode well for the counter . Inventory has again seen decline today. A close below 18800 will not bode well for the counter.

Support 1 – 18800 ( remain a strong level in the medium term )
Resistance 1 – 19215 ( basis 13 March’17 low )
Support 2 – 18660 ( today’s low )
Resistance 2 – 19450 ( basis 10 March’17 high )

On the macro economic parameter a slew of British data was below expectations .However trade balance was positive. There is not much to report in US accept Trump’s press meet. Considering the man’s past record we should be careful as surprise announcements can take place. Today it is the week end and volatility has been the theme for now. Investors and traders need to be careful as strong divergent trade is taking place and it seems that copper is getting re rated amidst supply side issues .