Buy crude by Dec end; sell gold now: Motilal Oswal Sec

Nifty BSE | NSE 25/05/12 Are Mutual Funds betting on Nifty?

Kuljeet Kataria of Motilal Oswal Securities recommends buying crude by December end with a protective stop loss of Rs 2,490 per barrel for a target of Rs 2,650-2,680 per barrel. He said that he would not buy in gold right now but would sell on every rise.

Here is a verbatim transcript of the exclusive interview with Kuljeet Kataria on CNBC-TV18. Also watch the accompanying video. 

Q: Crude prices have gained, they are nearly 2% higher at this point in time, we also have to tackle the US inventory data, which is expected to be bearish. How would you trade in crude?

 

A: The recommendation would be: buy crude by December end with a protective stop loss of Rs 2,490 per barrel for a target of Rs 2,650-2,680 per barrel.

 

Q: What kind of range are you looking at in case of crude in the international market?

 

A: In the international market, we should be buying crude with stop-loss below USD 50.5 per barrel or USD 50 per barrel. At every dip, we will be thinking of buying it with a target of USD 53 to USD 54 per barrel.

 

Q: We have seen gains continue for gold. It has held not only above USD 800 an ounce but also about USD 815 an ounce in four-five sessions now. Would you also buy this commodity?

 

A: I will not buy gold right now. I would be selling on every rise. Having on MCX February, a stop-loss of Rs 13,254 per 10 gram with a target of around Rs 12,828 per 10 gram and Rs 12,680 per 10 gram.

 

Q: What price would that translate to in international markets? Do you see it reaching USD 820 per ounce soon?

 

A: I think it would touch USD 820 per ounce or USD 835 per ounce. The stop-loss should be around USD 835 per ounce.

 

Q: We have seen some gains in the base metal prices but they have not been sustainable in recent days as well. What kind of strategy would you have for base metal prices?

 

A: For base metals, I would recommend selling copper at the range of Rs 182- 187 per kg with a stop-loss of Rs 193 per kg, targetting around Rs 168 and Rs 173 per kg.

 

Q: So are you still not buying into base metals and it's still a sell-on-rallies strategy?

 

A: Yes.

 

Q: With regards to agro commodities, we have seen a fair amount of volatility happen edible oil prices. Soybean or soy oil declined by nearly 30% in the last couple of months and we have seen a bit of strength coming back to this and gained nearly 1% yesterday - soybean is trading more than 2% higher at this point in time. Would you think a bottom has been made here and we might get into long position now?

 

A: I think soybean is going to play in a range only between Rs 1,600-1,700 per quintal. I would recommend a strategy that you should be buying in the range of Rs 1,630-1,600 per quintal with a stop-loss of Rs 1,580 per quintal targetting Rs 1,680-1,700 per quintal.