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Last Updated : Nov 06, 2018 12:14 PM IST | Source: Moneycontrol.com

Sell crude November futures, buy silver December futures: Reliance Commodities

Buy lead November 2018 futures in the range of Rs 145-144 and sell crude November 2018 futures on rallies, says Pritam Kumar Patnaik of Reliance Commodities

Moneycontrol Contributor @moneycontrolcom

Pritam Kumar Patnaik

Reliance Commodities

Lead: MCX Lead futures prices have been trading with high volatility in which it showed down move from Rs 156.4 to the low of Rs 139.8 by the end of October 2018.

Thereafter, it has managed to show sharp recovery from lower levels. This indicates that from medium term perspective this base metal has continued to trade in a broader range of Rs 139.5 and Rs 152 levels.

lead

MCX Lead Futures Daily Chart


The above daily chart shows that prices have been intact. Bollinger Bands and recent bounceback was witnessed from the lower end of the band. We can expect prices to move towards upper Bollinger Band which is placed at Rs 152.

It has been forming bullish candlestick pattern from last few sessions which suggests buyers have the upper hand and it is a positive sign.

Commodity Channel Index is suggesting that Rs 100 to 150 zone is acting as strong support from where recent reversal was witnessed and now we can expect this index to rise towards 200 level which is a positive sign over near term.

Over short term, Rs 142.5, whereas over medium term, Rs 139.50 look important support on the downside.

Strategy: Buy Lead November 2018 futures in the range of Rs 145-144 with Rs 142.5 as stop loss and target towards Rs 151.5-152 can be expected.

Silver: MCX Silver December 2018 futures has shown sharp recovery from Rs 38,000 and thereafter, prices have been managing to hold the gain which is hinting towards positivity for upcoming sessions.

The daily chart below shows that there is formation of bullish candlestick pattern for the first time after 6 days of downfall. Such candles formation indicates that buyers have the upper hand now. Hence one should look for buying opportunity.

silver

MCX silver December Futures Daily chart


It has managed to close above 100-days of EMA successfully. So as long as prices remain above this EMA, the trend will be positive.

RSI is testing 20 days of Simple Moving Average which is acting as resistance. We require RSI close above 20 days of EMA to see further positivity.

On the downside, Rs 38,100-38,000 is important support now. An upside move above Rs 39,100 will take prices towards Rs 40,100.

Strategy: Buy silver December 2018 futures in the range of Rs 38,500-38,450 with Rs 38,100 as stop loss and target towards Rs 39,600 can be expected.

Copper: In the recent week, copper futures moved lower towards Rs 432 from Rs 454 and thereafter sharp recovery has been witnessed towards Rs 450. This is keeping this base metal in volatile trend and one should trade with a strict stop loss to avoid surprises.

The 60-minute chart below shows that prices are intact downward moving black channel and as of now it is reaching towards the black channel resistance. It will be important to see if it manages to break the same or not in coming sessions.

copper

MCX Copper Futures Daily Chart


 

As of now, EMA of 20-days has crossed above 50-day-EMA which is hinting towards the positive crossover but for medium-term trend to turn positive, we require a move above Rs 454.

So in coming sessions, one should look at price action near Rs 454. Any close above this will take prices towards Rs 470 whereas failure to break Rs 454 will suggest down move towards Rs 440 is again possible.

Strategy: Buy on dips towards Rs 445-443 with a stop loss below Rs 440 and target towards Rs 450-452 can be expected.

Crude oil: In the last week, MCX crude prices continued to tumble and broke below the crucial support zone of Rs 4,800-4,750 decisively. This is indicating that the medium-term trend is reversing on the downside.

The daily chart below shows that since high made at Rs 5,669, prices have been moving lower with strong momentum and not a single time it has shown meaningful bounceback. This is suggesting strong trend on downside which is vulnerable in nature.

crude

MCX Crude November Futures Daily chart

 

The current down move has broken below the upward moving trendline support which was acting as good support from last few months. Apart from this, 100-days EMA has been breached for the first time since September 2013. This definitely indicates that the medium-term trend is reversing on downside.

MACD was till now finding support near 50, however, this time it has made a new low near 140, which suggests a shift in the range and a negative sign for crude.

In the near term, Rs 4,820 will act as strong resistance now from where breakdown has been witnessed as per polarity reversal.

Use sell on rallies strategy as long as Rs 4,820 is intact on the upside. Next major support is placed at Rs 4,525 followed by Rs 4,305.

Strategy: Sell crude November 2018 futures on rallies towards Rs 4,650-4,670 with Rs 4,750 as stop loss and target towards 4,525 can be expected.

The author is Head – Commodities at Reliance Commodities. 

Disclaimer: The views and investment tips expressed by investment experts 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.
First Published on Nov 6, 2018 12:14 pm
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