Crude oil commodity market prices rebounded smartly from its intraday lows wherein at one point of time, it was down around 2percentage while finally ended the session higher by around 0.7percentage to $92.90 per barrel mark. While there is no specified reason for the commodity to bounce back from its lows other than a probable technical pullback, other indicators continue to cast negative shadow over the black liquid.
We saw the US Industrial production data disappoint heavily meanwhile Chinese cues too continue to support weakness. If we look at other broad fundamental perspective, the commodity is weighed down by ease in global supplies as been the case lately wherein the impact is witnessed in both the Brent and the WTI. If we look at the initial forecasts for the inventory front, DoE data might show fall in crude stockpiles by 1.5 million barrels whereas gasoline stocks too seen falling marginally. Positive expectations over inventory may help the commodity not fall much; however weaker equities, ease in oil supplies and subdued Chinese data points would continue to hold it down. We recommend selling the commodity on pullbacks today for small profits.
Note that on a technical perspective too, prices look for some pullback initially after which we might register sell. On that note, we have bought and later sell recommendation in NYMEX markets today. AT MCX though, we advice sell at higher level. We hold our Spread strategy as recommend yesterday. Buy MCX Oct – Sell MCX Sep as weaker demand for the commodity should reduce the backwardation ahead of expiry this week.
Global Market View: Equities in the US finished on a mixed to weaker note though we saw huge slide in the Technology Index, the NASDAQ as probably traders look to book profits ahead of the crucial two day FED meeting starting today. Cautiousness prevails in the Asian equities as well wherein we are seeing moderate drop in all major indices however in currency space, the USDX was marginally lower to 84.15 levels while the Euro currency gained near a similar percentage. As stated earlier, markets focus this week would remain on the FOMC meeting wherein expectations are high that the US central bank would give a time-line for rising interest rates in the country. It is also likely to extend the cut of its bond–purchase program.
Economic Data: German and EU ZEW Economic Sentiment data along with US PPI report. Note after the disappointing IP number from US yesterday, we may see some negative surprise over PPI data.
Natural gas Commodity market climbed yesterday, extending its gains from last week. While we held a range bias in the commodity with negative bias on expectations that the commodity might look for fresh triggers over weather, extended warmer weather outlook in the USC west probably supported the commodity yesterday. While weather related changes are depicting a very high volatility in the US lately, we hold a cautious stand in the commodity though still believe, any major positivism in prices in unlikely. Intraday outlook is seen ranged.
Sell crude mcx Sep below 5705 SL 5730 Tgt 5620
Sell Silver mcx Dec below 41600 SL 41850 Tgt 41300