CPI, Housing Numbers and Commodity Trading Tips

Crude Oil prices fell yesterday as prices took note of weakness in the Brent, notwithstanding the tensions going on in the European region. The US based crude though saw a moderately better performance led by improving industrial output number in the US and positive trading in the US equity markets. Overall, as also stated in our weekly report, we continue to hold a negative stance on the commodity on expectations that crude oil demand in the US owing to slowing down winter. A similar impact can also be seen into the inventory scenario in the country over the past couple of weeks. We are not expecting any major positivity out of the tomorrows inventory number either.

In other related cues for the commodity, Hedge funds cut their long bets into the commodity from record levels last week. As per data from CFTC and updations from Bloomberg, money managers reduced their Net long position by 5.3% for the week ended March 11, its first decline in past eight weeks. Long positions fell nearly 3% while shorts rose for a third week. This further strengthens our stance towards the lower side on the commodity. We advice traders to build short positions into the commodity on pull-backs today.

Looking at some other aspects for the commodity, we had earlier recommend traders to look for rolling-over their long positions into next contract on declines. MCX, Mar-Apr spread currently stands near Rs 20. Though gains potential in spread from here looks limited ahead of expiry tomorrow, traders holding long positions during medium term are advised to continue rolling over on declines

Global market analysis: Market reactions remained mostly muted to the latest developments in Ukraine. The US markets posted a positive close overnight and the Asians are trading mainly positive this morning supported by higher Japanese stocks and weakening Yen. From the FX front, euro advanced to $1.3940 despite the euro zone annual inflation dropped in February. The USD index remained lower at 79.348.

Coming to crude oil, April future WTI oil prices fell by 0.82% last day and this morning is seen trading at $97.95. We believe the weakness on the commodity may remain mounted. We expect the crude stockpiles may continue to increase which may further pressure the commodity to trade down. So, for the day we recommend selling oil from higher levels. Lastly from the economic data front, we have the German’s WPI, ZEW survey, euro-zone trade balance, US CPI, housing numbers and the TIC flows.

Commodity Trading Tips

SELL GOLD MCX APRIL BELOW 30300 SL 30400 TGT 30200-30130

SELL CRUDE OIL MCX APR NEAR 6025 SL 6065 TGT 5975

Today Economic Data Indicators: