Sell MCX Copper Aug around Rs 425-430: Angel Commodities
Angel Commodities has come out with its report on Copper, Aluminum, Nickel, Lead and Zinc. According to the research firm, one can sell MCX Copper August contract around Rs 425-430 with a stoploss of Rs 436 for target of Rs 410.
July 11, 2012 / 14:01 IST
Angel Commodities has come out with its report on Copper, Aluminum, Nickel, Lead and Zinc. According to the research firm, one can sell MCX Copper August contract around Rs 425-430 with a stoploss of Rs 436 for target of Rs 410.
Copper
Copper, which is regarded as an indicator of economic growth has witnessed a mixed performance since the start of the year. Performance of the red metal in the first-half of the year indicates that the metal was resilient to the risk aversion in the overall financial markets and gained around 2.4 percent on the LME. This rise in prices during the first-half of the year was mainly witnessed during the initial months, especially between January to March’12. The year began with expectations of actions by global policymakers and this coupled with higher Chinese imports during that period supported an upside in prices.The world copper market witnessed a surplus during the first-quarter and we feel that demand concerns would persist amid heightening macroeconomic worries. We expect copper to trade with a bearish bias in the short-term and we recommend a Sell in MCX Copper August contract around 425 - 430 with Stop Loss of 436 and Target of 410 (CMP: 417.75)Aluminum
On a year-to-date basis, aluminum prices on the LME have slipped around 6 percent and the commodity is trading around $1900/tonne levels. During the same period, prices on the MCX have slipped only around 1.3 percent as weakness in the Rupee resisted sharp fall in prices. Since the start of the year a divergent trend in case of all base metals has been seen in the international and domestic markets on account of the currency factor. Demand concerns in case of aluminum have been dominating market sentiments. Japan, which is Asia’s largest aluminum importer, is expected to witness slow growth in aluminum demand and consumption levels are expected to remain at the lowest level since 2009.From a short-term perspective, we expect aluminum prices to trade with a downside bias and demand concerns coupled with the worries on the macroeconomic front would continue to play a dominant factor in providing direction to prices. If concerns on the European front increase then the DX could strengthen, thereby leading to pressure on prices in dollar terms. Latest statement by Chinese Premier Wen Jiabao is also negative for base metals and would additionally lead to decline in prices. From a one month’s perspective, we recommend a Sell in MCX Aluminum July contract around 107 – 107.50 with a Stop Loss of 111 and a Target of 102 (CMP: 105.10).Nickel
Amongst the base metals pack, nickel prices have witnessed the worst performance as the metal has slipped 12 percent on the LME on a year-to-date basis. On the MCX too, the fall in nickel prices is the largest decline when compared to other industrial metals and the commodity has slipped 7.4 percent year-to-date. Sharp downside in prices on the MCX was cushioned due to a weaker Rupee. A comfortable supply-side scenario amid slowing demand and a weak global economy, prices have taken a significant hit.With surplus and slow growth in demand being major factors in the nickel market currently, the price trend in the short-term is expected to be largely bearish. Economic slowdown in China and the ongoing European worries will continue to have a negative impact on nickel prices. The DX is expected to strengthen on account of poor risk appetite in the global markets and this factor too will add to pressure on nickel prices. From a one month’s perspective, we recommend a Sell in the MCX Nickel July contract around 930 -940 with a Stop Loss of 990 and a Target of 850/820. (CMP: 895.60).Lead and Zinc
In case of lead and zinc, surplus has been a feature of these markets and in the existing economic scenario, it is acting as a major downside factor. Year-to-date, lead prices on the LME have declined around 8.5 percent and rising production amid slow growth in demand is adding pressure on prices. While prices on the LME slipped sharply on a year-to-date basis, on the MCX lead prices have fallen only around 3.3 percent as depreciation in the Rupee helped cushion sharp downside in prices.Taking into consideration the situation of surplus coupled with expectations of slow growth in demand for lead and zinc, we expect the downtrend in prices to continue. With risk sentiments turning choppy, we expect the DX to strengthen and this factor too will lead to downside pressure on prices. Keeping in mind a month’s view, we recommend a Sell in the MCX Lead July contract around 106 with a Stop Loss of 110 and a Target of 101. (CMP: 103.65).Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.To read the full report click on the attachment 
Read More
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
