Angel Broking says sell crude, copper; buy gold in intraday

In an interview to CNBC-TV18, Naveen Mathur of Angel Broking gives his analysis of select commodities from the commodity basket.

He recommends a sell on crude oil on the MCX August contract in the range of about Rs 5,050 per barrel to 5,060 per barrel levels. He also recommends selling copper at around Rs 422 per kg levels on the MCX contract for August.
Mathur finds that the bullion market has been playing a risk-on and risk-off strategy these last couple of months. “For the intraday session, we would recommend buying the gold contract at around Rs 29,300 per 10 grams levels,” he adds. Below is an edited transcript of his interview. Q: There has been a reaction in the last day or two on crude. What are you telling your clients to do there?
A: Selling would be recommended for the intraday session on crude oil. We would recommend selling the MCX contract of August for crude oil in the range of about Rs 5,050 per barrel to 5,060 per barrel levels or so. Stop loss for this trade can be put in at around Rs 5,100 per barrel and targets are on the downside range of Rs 4,980 to Rs 5000 per barrel.
The markets are not very positive and even global markets are not doing great. We got some kind of credit downgrade for Germany, Luxemburg and Netherlands yesterday by Moody. So, overall sentiments are looking weak and going forward crude would not carry a great bullish tone. Hence we feel that the markets would be on the downside and therefore a sell strategy for the day. Q: Copper started the day okay on a stable note but you are not very bullish on that?
A: That’s right. In the Indian markets it has kind of range bound fundamentally between say around Rs 420-425 per kg levels. Technically, we have a sell call. Even the market does not on a fundamental side look too great on the bullish side. We feel that selling would continue to be the right strategy for intraday play. I recommend a sell on the MCX August contract at around Rs 422 per kg levels. A stop loss for this trade can be put in at around Rs 425 per kg and targets in the range of Rs 416-417 per kg for the day. Q: What about bullion - gold and silver? What is the trading strategy?
A: In the bullion markets, if you see from the last couple of months or so, they are following the trend of a risk-on and risk-off strategy. It is not trading on safe haven demand. The safe haven demand has actually gone into the US treasury and the German bonds. So overall, it doesn’t look to be a great safe haven demand coming in inspite of that entire crisis.
Risk sentiments would prevail and therefore fundamentally we see a weakness in the bullion markets. But technically for the intraday session, we would recommend buying the gold contract at around Rs 29,300 per 10 grams levels. The stop loss for this trade can be put in at around Rs 29,210 per 10 grams and expect targets on the upside in the range of Rs 29,520 per 10 grams to 29,550 per 10 grams levels.