Copper – Fundamentals Remain Bearish : Kamlesh Jogi

Copper – Fundamentals Remain Bearish

We have seen a short covering in Copper prices last week and market pushed down as Contract rollover and expiry settlements are over in International and national exchange.
I personally expect market to remain bearish in Short run and expect market to touch Rs. 220 per kg in MCX feb 2008 Contract.

Fundamentals:

· Copper fell in London, tracking stock markets lower, on concern slowing U.S. economic growth will curb demand for industrial metals. Nickel and zinc also dropped.

· The MSCI World Index of stocks fell 0.2 percent. Federal Reserve Bank of Boston President Eric Rosengren said yesterday U.S. expansion will be ``well below'' its long-term pace for two quarters. The U.S. is the world's second-largest user of copper and aluminum after China.

· Copper, which tends to track movements in global growth, is poised for the smallest gain in six years as bad debts in the U.S. housing market have slowed bank lending and curbed consumption in the world's largest economy.

· Japanese manufacturing orders, driven by residential and office construction, may drop 17 percent in a year because of declining housing starts, said Takashi Ishizawa, a real-estate analyst at Mizuho Securities Co.

· A housing slump will probably erode demand for industrial metals, including copper and nickel, according to the Japanese Electric Wire and Cable Makers' Association and the Japan Stainless Steel Association.

· Copper stockpiles monitored by the LME declined 1,325 tons, or 0.7 percent, to 188,175 tons, it said in a daily report, the biggest one-day drop since Sept. 17. They have jumped 44 percent since the end of September.

Technical Levels:

MCX Feb 2008 contract is having major resistance level at 272.90 and 283.10 while major support is seen at 259.10 and on the break of the same market may test the level of 242 and 220.

Recommendation;

Traders are advised to create short position on small pullback, market may give small up side correction/Short covering, can be used as Selling opportunity. Traders should become more cautious if market breaks major resistance levels.



Author:

Kamlesh Jogi
Commodities research Analyst

Mail me at: kamleshjogi@gmail.com


Disclaimer: Keep reasonable stop loss levels, follow them very strictly and keep trailing the stop loss. The information contained in this article is collected from reliable sources and believed to be true. Opinions expressed are those of the individual, and readers are urged to exercise their own judgment in trading.