REUTERS TECHNICAL ANALYSIS Q2 OUTLOOK Wang Tao

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1 REUTERS TECHNICAL ANALYSIS Q2 OUTLOOK Wang Tao An employee of Singapore Mint displays a 5 troy ounce fine gold Year of the Rabbit commemorative coin. REUTERS/Tim Chong No information in this analysis should be considered as being business, financial or legal advice. Each reader should consult his or her own

2 U.S. oil may rise TO $125.51/bbl in 3 mths U.S. oil <CLc1> may rise to $ per barrel over the next three months based on its wave pattern and a Fibonacci projection analysis.s The contract is riding on a wave C or wave (3), advancing towards the 100 percent Fibonacci projection level, based on the length of the wave A or wave (1) that started at the Dec 2008 low of $32.40 and ended at $ But the upside could be extended beyond $125.51, as either the wave C or the wave (3) is capable of pushing the contract up to an eventual target at $159.35, the percent projection level. Before the long-term uptrend develops towards $125.51, a retracement is likely to drive oil as deep as $95.40, the 50 percent Fibonacci retracement on the rise from $83.85 to $ Before the long-term uptrend develops towards $125.51, a retracement is likely to drive oil as deep as $95.40, the50 percent Fibonacci retracement on the rise from $83.85 to $

3 Brent oil TO rise TO $125.13/bbl in 3 mths Brent oil <LCOc1> is expected to rise to $ per barrel over the next three months, after a shallow retracement to around $107, based on its wave pattern. The contract is riding on a powerful wave C or wave (3), as the rally from the December 2008 low at $36.20 adopted a five-wave mode when it ended at the May 2010 high of $ The wave C or the wave (3) is capable of traveling to $125.13, the 100 percent Fibonacci projection level, based on the length of the wave A or the wave (1). Before the bulls take control, a moderate retracement will drive the oil price down to about $107. However, the upside could be extended to $ the percent Fibonacci projection level, should the bullish momentum be strong enough to push the contract above $125 rapidly.

4 U.S. gasoline TO rise TO $3.4802/gALLON in 3 mths New York RBOB gasoline <RBc1> will rise to $ a gallon over the next three months, after a shallow retracement which could be limited to $ The current rally is labeled as a wave C, or wave (3), which is the second part of a long-term bull trend that started from the December 2008 low of $ A Fibonacci projection analysis based on the length of wave A, or wave (1), reveals the next bullish target will be $3.4802, the 100 percent level, as the 61.8 percent level at $ has been successfully surpassed. Short-term technicals indicate a moderate retracement, to be limited to $2.8476, and a fall below which will find a strong support at $ Short-term technicals indicate a moderate retracement, to be limited to $2.8476, and a fall below which will find a strong support at $

5 U.S. natural gas TO rise TO $5.405/mmBtu in 3 mths U.S. natural gas <NGc1> is expected to rise to $5.405 per million British thermal units over the next three months, as a powerful wave (3) is unfolding. The wave (3) is capable of pushing the contract to $6.4390, the percent Fibonacci projection level, based on the length of the wave (1), which has developed in a five-wave mode from the October 2010 low at $ Conservatively, the 100 percent Fibonacci projection level at $5.405 has been targeted, and a successful rise above it will open the way towards an aggressive target at $ Retracement from the current level could be limited to $ Confirming the bullish outlook is the wave pattern on the move from the September 2009 low at $2.4090, labeling the current rally as a wave C, which may eventually travel to $ a 100 percent Fibonacci projection level, based on the length of the wave A. Retracement from the current level could be limited to $4.060.

6 Newcastle coal biased TO rise TO $155/T in Q2 The McCloskey s cash price for Newcastle FOB coal <CO-FOBNWC-AU> is biased to rise to $155 per tonne over the next three months. The current consolidation has neutralized the trend signal and made it difficult to choose a wave labeling between the two alternative counts. The bias could still be with the bulls, as the uptrend will be assumed steady within a rising channel before coal slides dramatically below $114. Only after coal climbs above $136.85, the 61.8 percent Fibonacci retracement on the fall from $ to $60.20, could the uptrend be confirmed. But only after coal climbs above $136.85, the 61.8 percent Fibonacci retracement on the fall from $ to $60.20, could the uptrend be confirmed.

7 SpOT gold s upside limited TO $1,545/oz in 3 mths Spot gold <XAU=> seems exhausted in its rally and may have a limited gain to $1,545 per ounce before a deep correction starts over the next three months. The metal is riding on a wave C which is considered a part of a long-term rally that started in It may extend slightly higher to $1,545, the percent Fibonacci projection level, based on the length of the wave A, which started at a low of $34.95 and ended at a high of $835 in The resistance at $1,545 should not be underestimated by bulls as the 100 percent level at $1,051 triggered a deep correction to $ in March 2008, even before it was touched. Support is at $1,300, a fall below which may extend to $1,060. Support is at $1,300, a fall below which may extend to $1,060.

8 SpOT silver TO slip TO $26-$29 range in 3 mths Spot silver <XAG=> is expected to edge down to between $26.38 and $29.15 per ounce over the next three months, based on its wave pattern and a Fibonacci retracement analysis. A wave C, or wave III, could be approaching an end, as a strong resistance is seen at $36.25 the percent Fibonacci projection level, based on the length of wave A which started in November 2001 at $4.04 and ended at the March 2008 high of $ Support is at $35, a drop below which will confirm the start of the retracement. The rise from the February 2010 low of $14.63 could also have completed a five-wave cycle at $38.13, and the following retracement may reach $29.15, the 38.2 percent Fibonacci retracement level or lower to $26.38, the 50 percent level. Support is at $35, a drop below which will confirm the start of the retracement.

9 LME copper TO rise TO $10,800/T in 3 months LME copper <MCU3=LX> is expected to rise to 10,800 per tonne over the next three months, as its long-term uptrend is steady based on its wave pattern and a trendline technique. An upward wave (5) is progressing towards $10,800, as indicated by an upper trendline, passing through the peaks of the wave 1, the wave 3 and the wave 5. A break above $9,784 is important in confirming a move to $10,800 especially after the recent mild retracement from this level, and a fall below $8,917 will extend to $8,400. The deep retracement from the Feb. 15 high at $10,190 to a low at $8, is labeled as a wave (4), which has adopted a corrective a-b-c wave mode and stopped around $8,769, the 38.2 percent Fibonacci retracement on the rise from the July 2010 low at $6,470 to $10,190. Strategically, a break above $9,784 is important in confirming a move to $10,800 especially after the recent mild retracement from this level, and a fall below $8,917 will extend to $8,400.

10 LME ALUminium may surge TO $3,043/T in 3 months LME aluminium <MAL3=LX> could rise to $3,043 per tonne over the next three months, based on its wave pattern and a Fibonacci projection analysis. The rise from the Feb 2009 low at $1,279 to a high at $2,494 could be broken down into five small waves, which make up a big wave A or a wave (1). The five-wave cycle indicates the current rally could be labeled either as a powerful wave C or a fierce wave (3), advancing towards the 100 percent Fibonacci projection level, based on the length of the wave A or the wave (1). A deep drop below $2,443 will violate the bullish outlook. The metal has cleared a strong resistance at $2,579, the 61.8 percent Fibonacci projection level, and it serves as a support now. A deep drop below $2,443 will violate the bullish outlook.

11 LME nickel TO rally TO $33,111/T in 3 mths LME nickel <CMNI3> is expected to climb to $33,111 per tonne over the next three months, based on its wave pattern and a Fibonacci projection analysis. The metal is riding on a wave (3), or wave C, progressing towards the percent Fibonacci projection level, based on the length of wave 1 that started from $17,375 and ended at $25,200. However, the upside could be extended to $35,970, a more aggressive projection of wave (3) or wave C target, based on the length of wave (1) or wave A. It will be critical for a pivotal support at $24,675 to hold, as the rally from this level is presumed as the beginning of wave (3) or wave C It will be critical for a pivotal support at $24,675 to hold, as the rally from this level is presumed as the beginning of wave (3) or wave C.

12 LME zinc TO rise TO $3,275/T in 3 mths LME zinc <MZN3=LX> is expected to rise to $3,275 per tonne over the next three months, based on its wave pattern and a Fibonacci projection analysis. The contract is riding on an upward wave C or wave 3, traveling towards the 100 percent Fibonacci projection level at $3,275, based on the length of the wave A or the wave 1. The preceding consolidation from the Oct high at $2, was triggered by a resistance at $2,626, the 61.8 percent Fibonacci projection level, and that indicates the 100 percent level will eventually be touched. Strategically, zinc needs to clear the resistance at $2,626 to develop a steady rise towards $3,275 and confirm an inverted head-and-shoulders pattern, which will point to an aggressive target at $3,632. Strategically, zinc needs to clear the resistance at $2,626 to develop a steady rise towards $3,275 and confirm an inverted head-and-shoulders pattern, which will point to an aggressive target at $3,632.

13 Shanghai copper TO rise TO 85,000 YUAN/T in 3 mths Shanghai copper <SCFc3> is expected to rise to 85,000 yuan a tonne over the next three months, subject to a break above a strong resistance at 76,290 yuan. A wave pattern shows that the contract could be riding on a strong wave C or wave 3, unfolding towards 90,870 yuan, the 100 percent Fibonacci projection level, based on the length of the wave A or the wave 1 which started at the December 2008 low of 22,210 yuan. A fall below a minor support of 68,250 yuan will trigger a further loss to 65,100 yuan. The current retracement from the February 2011 high at 76,290 yuan was triggered by a strong resistance of 75,810 yuan, a high touched in April Working together with the resistance is another resistance at a lower level of 74,840 yuan, the 61.8 percent Fibonacci projection level. Even though it is highly likely for the uptrend to continue,a rise above 76,290 yuan is still requested to confirm the continuation.

14 Shanghai rebar TO revisit 5,188 YUAN/T in 3 mths Shanghai rebar <SRBc7> is expected to revisit the Feb. 11 high at 5,188 yuan per tonne over the next three months, based on its wave pattern and a Fibonacci projection analysis. The contract is still riding on a wave C, even following a deep retracement which started from 5,188 yuan and found a strong support at 4,597 yuan, the 50 percent Fibonacci retracement on the rise from 4,006 yuan to 5,188 yuan. Support is at 4,597 yuan, a break below which will extend to 4,458 yuan The retracement was triggered by a resistance at 5,106 yuan, the 100 percent Fibonacci projection level based on the length of the wave A, and the wave C may have resumed its advance towards a long-term target at 5,526 yuan -- the percent Fibonacci projection level. Support is at 4,597 yuan, a break below which will extend to 4,458 yuan.

15 SpOT uranium TO rise TO $88/lb by 2012 Spot uranium <UX-U3O8-SPT> is expected to end the current correction within a range of $52 and $55 per lb and rise towards $88 by end of 2012, based on its wave pattern and a Fibonacci retracement analysis. A bottom could have formed around $41, after an almost three years fall from the June 2007 high at $136. The sharp rebound from about $41 ended around $70, close to $77, the 38.2 percent Fibonacci retracement on the fall from $136 to $41. But a long-term bull trend could have been established as the rise from $41 to $70 adopted a five-wave mode, making up the first leg of a big rally. The second upward leg of the rally will push the price to $88, the 50 percent Fibonacci retracement level, after the current drop finds in due course a strong support zone between $52 and $55, the 61.8 percent and the 50 percent Fibonacci retracements on the rise from $41 to $70. The second upward leg of the rally will push the price to $88, the 50 percent Fibonacci retracement level, after the current drop finds in due course a strong support zone between $52 and $55, the 61.8 percent and the 50 percent Fibonacci retracements on the rise from $41 to $70.

16 CBOT soybeans TO rise TO $ /2 a bsh in 3 mths CBOT first-month soybeans <Sc1> may rise to $ /2 per bushel over the next three months based on its wave pattern and a Fibonacci projection analysis. The contract is riding on a powerful wave C which may eventually push the price to $17.12, the percent Fibonacci projection level based on the length of wave A. Wave C seems to have adopted an impulsive five-wave mode, with an upward wave V unfolding towards $ /2, the percent Fibonacci projection level. Only a fall below a pivotal support at $12.70, the presumed wave IV trough, could temporarily invalidate the bullish outlook, with a bearish target to be established at $ An ascending trendline passing through the peaks of wave I and wave III also points to the same. Only a fall below a pivotal support at $12.70, the presumed wave IV trough, could temporarily invalidate the bullish outlook, with a bearish target to be established at $11.78.

17 CBOT corn TO rise TO $8.00 a bushel in 3 mths CBOT corn <Cc1> is expected to rise to $8.00 per bushel over the next three months, as its long-term uptrend is intact based on its wave pattern. A wave 4 retracement could have completed after it touched a low at $6.08, which falls within a strong support zone between $5.78 and $6.38, the 38.2 percent and 23.6 percent Fibonacci retracements on the rise from $3.24-1/2 to $7.35. The contract could have started an upward wave (5), advancing towards $8.00, as pointed by an upper trendline which passed through the peaks of the wave (1) and the wave (3). A fall below a pivotal support at $6.70 will signal the wave (4) correction has extended towards the $6.08 level and it may take a longer time before the wave (5) develops. Nevertheless, the bullish target at $8.00 should remain intact. A fall below a pivotal support at $6.70 will signal the wave (4) correction has extended towards the $6.08 level and it may take a longer time before the wave (5) develops. Nevertheless, the bullish target at $8.00 should remain intact.

18 CBOT wheat TO rise TO $8.93-1/4-$9.45/bushel in Q2 CBOT wheat <Wc1> would rise into a range of $8.93-1/4 to $$9.45 over the next three months, as a long-term uptrend could have been established after a rise from the June 2010 low of $4.25-1/2 per bushel. The rise developed a five-wave cycle, labeled as a wave (1), and the following wave (2) correction from the wave 5 peak at $8.93-1/4 could have ended around $6.59-1/2, the 50 percent Fibonacci retracement level. The upward wave (3) will travel towards an aggressive target at $ /4, the 100 percent Fibonacci projection level based on the length of the wave (1). It is critical for wheat to stay above a pivotal support at $6.59-1/2, as a fall below which will invalidate the wave counts, with a bearish target to be established at $5.50. But a realistic target would be $9.45, the 61.8 percent level. It is critical for wheat to stay above a pivotal support at $6.59-1/2, as a fall below which will invalidate the wave counts, with a bearish target to be established at $5.50.

19 New York sugar TO fall TO cents/lb in 3 mths New York sugar <SBc1> is expected to fall further to cents per lb over the next three months as its long-term trend has turned bearish. A five-wave cycle was completed on the rise from the June 6, 2010 low of cents to a record high of cents, and the consequent decline has been too deep to be considered a retracement. Instead, it could be part of a longterm downtrend. Wave pattern suggests a double zigzag mode for the current slide, labeled as a-b-c-x-a-b-c, with the second wave a to unfold towards cents, the 61.8 percent Fibonacci retracement on the rise from cents to cents. The downside, however, could be extended much lower, as the major downtrend is eyeing an eventual target at 15 cents. Upon hitting cents, sugar is expected to extend its loss to cents. The downside, however, could be extended much lower, as the major downtrend is eyeing an eventual target at 15 cents. Upon hitting cents, sugar is expected to extend its loss to cents. Only a rise above 30 cents could abort the bearish outlook.

20 New York coffee TO fall TO $2.1245/lb in 3 mths New York coffee <KCc2> will fall to $ per lb over the next three months, as it faces a strong resistance zone of $ to $2.77. The zone was formed by three highs at $2.7262, $2.74 and $2.77, touched respectively in January 1986, July 1994 and May Obviously, coffee failed to break the resistance zone, as following its brief piercing above $2.77, it fell sharply from a record high at $ below $ the low of the zone. A Fibonacci retracement analysis on the sharp rise - which is too sharp to be sustainable, reveals a deep retracement will drive coffee down to $2.1245, the 50 percent level on the rise from the February 2010 low at $ to $ Chances are remote for coffee to rise above $2.9665, which seems to have become an upside limit when considering it is near the previous three historic highs. Chances are remote for coffee to rise above $2.9665, which seems to have become an upside limit when considering it is near the previous three historic highs.

21 New York cocoa TO retrace TO $2,880/T before a rise New York cocoa is expected to retrace to $2,880 per tonne before recovering the drop and rallying towards $3,800 over the next three months. The wave pattern shows that a wave 4 retracement is developing towards a lower trendline support at $2,880, after cocoa failed to break an upper trendline resistance at $3,800. Upon touching the $2,880 level, cocoa may resume its long-term uptrend, as an upward wave 5 will make its last attempt to test the resistance at $3,800. For a bearish reversal on the long-term uptrend, the bears need to drive the contract below a key support at $2,590. For a bearish reversal on the long-term uptrend, the bears need to drive the contract below a key support at $2,590.

22 Palm oil could revisit 3,967 ringgit/t in 3 mths Malaysian palm oil <KPOc3> is expected to revisit its Feb. high at 3,967 ringgit over the next three months, based on its wave pattern. The contract is still riding a long-term uptrend, which started at 1,331 ringgit in Oct. 2008, and it has adopted an A-B-C wave mode, with the wave C yet to reach its target at 4,388 ringgit, the percent Fibonacci projection level. As a result, the primary trend has not been violated by the current deep correction, which has been labeled a wave 4, to be followed by an upward wave 5. The contract is expected to resume its uptrend very soon and a further slide below 3,119 ringgit is unlikely. A strong support is observed at 3,119 ringgit, jointly provided by the 50 percent Fibonacci retracement on the rise from 2,270 ringgit to 3,967 ringgit, and an ascending trendline parallel to that passing through the peaks of the wave 1 and the wave 3.

23 New York orange juice may rise TO $1.90/lb in Q2 New York orange juice <OJc1> is expected to rise to $1.90 per lb over the next three months, as indicated by its wave pattern. The rally from the February 2009 low at $ adopted a five-wave mode, with the wave (4) likely to have bottomed at the March 22 low of $1.5310, and an upward wave (5) unfolding towards the January high. However, the upside could be extended to as much as $2.0950, a high touched in March 2007, as the wave (5) could travel beyond the peak of the wave (3). Support is at $1.5310, a fall below which will extend to $1.4534, the 38.2 percent Fibonacci retracement on the rise from $ to $1.90. Support is at $1.5310, a fall below which will extend to $1.4534, the 38.2 percent Fibonacci retracement on the rise from $ to $1.90.

24 CME lean hogs TO rise TO cents/lb in 3 mths CME lean hogs <LHc1> will rise to cents per lb over the next three months, based on its wave pattern and a Fibonacci ratio analysis. The contract is riding on a powerful wave c, progressing towards cents, the 100 percent Fibonacci projection level, based on the length of the wave a. The preceding retracement to cents was triggered by a resistance at cents, the 61.8 percent Fibonacci projection level, and the following quick recovery indicates the wave c has resumed its rally towards cents. Support is at 90 cents, a fall below which may extend to cents. Support is at 90 cents, a fall below which may extend to cents.

25 CME lumber bullish, eyes $364.7 in Q2 CME lumber futures <LBc1> is expected to rise to $ per thousand board feet over the next three months, as its long-term uptrend is still intact following a retracement to $275. The contract is riding on a wave C, progressing towards the 100 percent Fibonacci projection level at $363.80, based on the length of the wave A, which started at the January 2009 low of $ and ended at $ Lumber may clear the resistance at $ soon, and it must do so before it moves to $363.80, but a fall below $275 will extend to $222. The preceding retracement to $275 was triggered by a resistance zone of $ to $327.50, respectively the 76.4 percent Fibonacci projection level and the wave A peak, and it has not violated the longterm uptrend. Lumber may clear the resistance at $ soon, and it must do so before it moves to $363.80, but a fall below $275 will extend to $222.

26 DOLLAR index TO fall TO 63 in Q2 The dollar index <.DXY> will fall towards over the next three months, based on its wave pattern and a Fibonacci projection analysis. The index, which tracks the dollar s performance against a basket of major currencies, will drop below a range that came with the preceding consolidation between and , and the (A)- (B)- (C) corrective wave mode indicates the major downtrend is still intact. A downward wave C is progressing towards the 100 percent Fibonacci projection level, based on the length of wave A which started at the June 2010 high of and ended at the November 2010 low of A downward wave C is progressing towards the 100 percent Fibonacci projection level, based on the length of wave A which started at the June 2010 high of and ended at the November 2010 low of

27 CRB eyes 409 in 3 months The Reuters-Jefferies CRB index <.CRB>, which tracks 19 mostly-u.s. traded commodities, is expected to rise to between and over the next three months, based on its wave pattern and a Fibonacci projection analysis. The current rally is part of a wave (C), advancing towards , the percent Fibonacci projection level, based on the length of wave (A). A Fibonacci retracement analysis on the fall from to reveals a slightly higher target at , the 76.4 percent level. Retracement from the current level would be limited to , the 100 percent Fibonacci projection level. Retracement from the current level would be limitedto , the 100 percent Fibonacci projection level.

28 BALTIC dry index TO zigzag up in Q2 Baltic dry index <.BADI> is expected to retrace to 1,200 first and rise towards 1,897 thereafter in the second quarter, based on its wave pattern and a Fibonacci retracement analysis. The rise from the Dec low at 663 to a high at 4,661 seems to have adopted a fivewave mode, and it could be the first part of a big uptrend. The retracement from the presumed wave 5 peak at 4,661 is approaching an end and could have possibly ended at 1,043, a low touched in Feb. But at the beginning stage, the construction may take a longer time, with the index retracing to 1,200 to form a base before a more fierce rally starts. The index is managing to construct an uptrend pointing to 1,897, the 23.6 percent Fibonacci retracement on the fall from 4,661 to 1,043. But at the beginning stage, the construction may take a longer time, with the index retracing to 1,200 to form a base before a more fierce rally starts.

29 New York cotton 3-mth TARget range cents/lb New York second-month cotton <CTc2> is expected to fall to cents per lb over the next three months as a strong resistance is seen at cents. The resistance lies at the percent Fibonacci projection level of a wave C target, based on the length of a wave A, which developed from the October 2001 low at cents to the March 2008 high at cents. The current retracement may adopt an a-b-c corrective mode, with wave c falling towards cents, the 100 percent Fibonacci projection level, based on the length of wave a. The Relative Strength Index has formed a bearish divergence, suggesting a deep correction is on the way. A rise above a resistance at cents will counter the bearish outlook. A Fibonacci retracement on the rise from cents to cents reveals a lower target at cents, the 38.2 percent level.

30 EDITORIAL CONTACTS FOR MORE INFORMATION: Jonathan Leff (Global Editor, Commodities & Energy) (Editor, Commodities & Energy, Americas) , Veronica Brown (Editor, Commodities and Energy, EMEA) , Learn more about our products and services for commodities professionals, click here Send us a sales enquiry, click here Contact your local Thomson Reuters office, click here Sambit Mohanty (Editor in Charge, Commodities & Energy, Asia), sambit.mohanty@thomsonreuters.com Wang Tao (Market Analyst, Singapore), Wang.Tao@thomsonreuters.com, Catherine Trevethan (Graphic Editor Asia) Financial Graphics, Financial.graphics@thomsonreuters.com Privacy statement: Reporting by Wang Tao; Editing by Himani Sarkar wang.tao@thomsonreuters.com; Phone: Reuters Messaging: wang.tao.reuters.com@reuters.net If you have a query or comment on this story, send an to news.feedback.asia@thomsonreuters.com To find out more about how we may collect, use and share your personal information please read our privacy statement here 2010 Thomson Reuters. All rights reserved. Republication or redistribution of Thomson Reuters content, including by framing or similar means, is prohibited without the prior written consent of Thomson Reuters. Thomson Reuters and the Thomson Reuters logo are trademarks of Thomson Reuters and its affiliated companies.