News & Development Rising Channel Ichimoku Cloud Tenken-sen KijunSen

Transcription

1 29 th May 2018

2 News & Development MCX Natural Gas prices has witnessed a incline of 14% during the months of April-May and closed at Rs.199.5/mmbtu by 25 th May. Higher demand in the power sectors in the domestic markets owing to summer season in India led to incline in Natural gas futures. Similar incline of 10.53% has also been witnessed in NYMEX Natural Gas futures during the above period as price closed at $2.980/mmbtu by 25 th May. Warmer weather conditions has also been witnessed in United states due to approaching summer season which has led to higher demand for air conditioners. Looking forward, we expect Natural Gas prices to remain bullish with proper summer season likely to begin in United States by June first week. This is expected to bring warmer to higher temperatures in United states increasing the demand for power sectors. Higher inventories of 1629 bullion cubic feet (reported as on 18 th May) and rainfall in western regions of US during the current period may bring some correction for the next few days. But the overall demand is estimated to exceed the supplies by the end of June month. On the Indian front, forecasted normal monsoon by IMD (Indian Metrological Department) is likely to increase the sowing acreage of kharif crops. This is expected to increase the demand for natural gas in the fertilizer sector for the coming months. Hence, we expect moderate bullish trend in MCX Natural Gas prices for the coming month. On a daily chart, price has given a Rising Channel formation breakout which indicates a bullish move in the price. In addition, Price has sustained above Ichimoku Cloud where Tenken-sen has crossed KijunSen which reinforce bullish signals for near term. Furthermore, price has sustained above 21 days SMA which intimates long term trend remains bullish. Moreover, a momentum indicator RSI (14) and MACD has traded on bullish mode with positive crossover on daily chart. So for short term perspective, one can initiate a buy position in MCX Natural gas (June) at CMP Rs.202 or on dips in the prices till Rs. 197 should be used as buying opportunity for an upside target of Rs. 222 levels. However, the bullish view can be reversed if MCX Natural gas (June) prices close below the support of Rs Overall, we hold our bullish view in MCX Natural gas for the next one to two months.

3 News & Development NCDEX Jeera spot price has traded in the range of Rs /quintal during the months of April-May and closed at 16100/quintal by 25 th May. This is mainly due to similar buying and selling activities in the major spot market Unjha. Production of Jeera for which has witnessed an incline of 35-40% in Gujarat, brought selling pressure during the initial phase of the above period. However, lower prices in return brought increased buying by exporters which has cushioned prices. Post first week of May, Unjha spot price has sustained above Rs levels due to Ramadan (Ramzan) buying in the domestic and international markets. Overall Jeera spot price has shown an incline of 2.84% during the above period. NCDEX Jeera futures on the other hand has witnessed an incline of 10.78% from 2 nd April and closed at Rs.16080/quintal by 25 th May. Looking forward, we expect export demand for Indian Jeera to be strong owing to prevailing geopolitical tensions in Syria. This is projected to bring decline in Syria s cumin production during June-July, which is the major harvesting period. Also farmers at the domestic level are likely to reduce supplies to keep the prices supported for the months ahead. Upcoming monsoon may also reduces the arrivals in the domestic mandis which is expected to keep the prices on the higher side. In consideration with the above factors, we expect bullish trend in NCDEX Jeera futures for 1-2 months. On a daily chart, NCDEX JEERA price has been trading within a Rising Channel formation which indicates a bullish move in the price. In addition, Price has sustained above Ichimoku Cloud where Tenken-sen has crossed KijunSen which reinforce bullish signals for near term. Furthermore, price has sustained above 21 days SMA which intimates long term trend remains bullish. A daily momentum indicator RSI reading is at 62 level with a positive crossover which points out for a positive breath in the counter. So for short term perspective, one can initiate a buy position in NCDEX Jeera (July) at CMP Rs or on dips in the prices till Rs should be used as buying opportunity for an upside target of Rs levels. However, the bullish view can be reversed if NCDEX Jeera (July) prices close below the support of Rs Overall, we hold our bullish view in NCDEX Jeera for the next one to two months. SEBI Registered Research Analyst * Please Refer Disclaimer on Website

4 Commodity LTP WoW (%) MoM (%) Open Interest (weekly) NYMEX Natural Gas ($/mmbtu) MCX Natural Gas (Rs./mmbtu) NCDEX Jeera (Rs./quintal) US Natural Gas Inventories Seasonality Chart Commodity Country Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jeera India Syria Turkey Sowing Growth Harvesting/ Arrivals SEBI Registered Research Analyst * Please Refer Disclaimer on Website

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