Mcx Crude oil commodity market trading recorded another day of huge drop as Brent and the WTI, both tumbled while both of them officially moving into bear territory as compared to their 2014 highs. As of yesterday’s update, OPEC basket for crude oil slipped to near $88, the agency’s officials notified putting further pressure on the global oil markets which have already been flooded with easing supplies and lower demand. WTI touched a low near $84 per barrel yesterday though managed good pullback in last few hours and closed down. The IMF’s earlier statement which showed, the world economy would expand at a slower pace of 3.8percentage in 2015 as compared to earlier forecast of a growth near 4percentage in July weight markets sentiment with continued weaker EU and Chinese data variables fueling further concerns. Equities across the globe fell last day also adding to the downside pressure on the oil prices globally.
As of today morning trade, we are seeing fresh pressure escalating over both WTI and Brent which are down by 1.8percentage and 1.75percentage respectively and that should push our markets fairly lower by around 1percentage at the time of opening (adjusting with Rupee and yesterday’s closing). Though direction for oil stays down, daily RSI has moved to near 16 for the WTI, so there should be a pullback sooner than later. We recommend fresh sell only on pullback or better that traders can take bets in other non-agri commodities today rather than target crude oil.
Global Market View as of Friday morning, all Asian markets are trading on a negative note tracking the huge and surprising fall in US equity markets overnight. S&P 500 closed at 1928.00 down by more than 2percentage as markets feel uncertain about the Global growth prospects, and this in turn could be having a negative effect on the companies or corporate earnings. Dollar index has recouped some of the losses from the last two days wherein it touched a low of 85.00 while is currently trading at 85.50. Most of the global currencies earlier appreciated with respect to the dollar with majors being Euro and Pound which advanced to 1.2700 and 1.6122 yesterday, though are marginally down from those highs. There is no major economic data to be released in today’s session so probably movement might remain constrained in most non-agri commodities locally and globally.
We maintain bearish view in the commodity on account of continued weather related cues in the US and largely increasing supplies in the country. As per EIA report, stocks increased by 105 billion cubic feet for the week ending October 3, compared with an expected increase of around 108 BCF. However still its was way higher than 5 year average injection during this time of the year around 84 BCF, and inflicts price direction. As said yesterday, MDA said temperatures in the East will range from seasonal to about 1 degree below normal from Oct 18 through Oct 22 against earlier forecast for a shot of cold air sweeping the Midwest during the period. We hold selling bias in the commodity for today.
Sel l Silver Mcx Dec below 38560 SL 38860 Tgt 37950
Sell Natural Gas Mcx Oct below 233 SL 236 Tgt 227