You are here: Home » Markets » Commodities » Precious Metals
Business Standard
Web Exclusive

Outlook & trading strategies for Copper, Gold by Tradebulls Securities

Commodities Outlook & Stock recommendation by Bhavik Patel - Sr. Technical Analyst

Bhavik Patel  |  Mumbai 

Copper producers face uneven playing field

Rupee: Boosted by positive regional risk appetite after the US and Indian equities reached record high, we may see dollar inflow in our market. was getting stronger amid hopes of tax relief but geopolitical factors concerning India has again made vulnerable. I wrote before that can test levels till 70.60 and won’t appreciate much which is exactly how it is paving out. I expect rupee to trade in the range of 71.40-70.80 in short term.

Gold prices are trading steady after the US and China reached limited trade deal on Friday. It is trading in the range of $1,480-$1,465. The US and China have reached a partial trade deal, UK Prime Minister Boris Johnson won an election mandate on Brexit, and the US reached a trading deal with its neighbors, Canada and Mexico. It looks like is forming base. has been trading in tight range since November 4 and is unable to move above 50-day moving average in COMEX. Volumes are decreasing as we approach holiday season. needs to break above $1,492 for decisive breakout. In MCX, 37,500 continues to be strong support while 38,300 is proving to be strong resistance. Upside seems capped till 38,300. We are bullish on gold. Historically, gold trades well in January till late February.

Silver rallied initially during the trading session on Tuesday to test the 50-day EMA, which is currently at the $17.13 level. At this point, the market is starting to run out of momentum so it would make sense to see some selling come back. Since November 6, after the broke $17.50, it is unable to close above 50-DMA. It needs to close above $17.17 for a clear buy trend. In MCX, is expected to test levels of 44,700-44,800 on the upside and maintain long position till 44,100 is not breached on the downside. Above 44,800, next resistance comes at 45,200.

Crude oil is trading at a 3-month high and is stuck at the higher end of the range of $65-$67.5. There is significant resistance at the $67.50 level, so crude oil will grind in the range of $65-$67.5 and needs to break $67.5 for bulls to really give charge. I have no interest in shorting though, because, for me, it’s obvious that the market is extraordinarily well supported underneath. Last week, hedge funds and other money managers made the strongest shift to net-long bets on crude oil in two years, a sign that market sentiment may be turning bullish.

Buy | TGT: Rs 452 | Stoploss: Rs 433

has made double bottom pattern at Rs 425 and bounced nicely till Rs 443. It has given 20 and 50 DMA crossover and there is no divergence on RSI_14. Since December 9, it is also trading above the short term moving average of 5 EMA, indicating that the trend is bullish. We expect to test levels of 452-455 and so we recommend long position near Rs 440 for the expected target of Rs 452 and stoploss of Rs 433 on a closing basis.

Buy Gold | TGT: Rs 38,300 | Stoploss: Rs 37,500

Gold is trading in the range of 38,400-37,500. Clearly with ongoing consolidation, traders should opt for range-bound trading. Gold is in the middle of the range after bouncing from the lower end of the range, so now we expect gold to test the higher end of the range. There is also no divergence in RSI_14 on the daily scale and gold is above 20 and 50 EMA which is a positive sign. So buy at current level with target of 38,300 and stoploss of 37,500 on a closing basis.


Disclaimer: Views expressed are the author's own. He may have positions in one or more stocks.

First Published: Fri, December 20 2019. 08:14 IST
RECOMMENDED FOR YOU