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Turnover was lower last week as traders geared up for the January series expiry. The week-on-week market-wide turnover on the MCX fell by 11 %. The market-wide open interest fell 8%. The MCX turnover gainers during the week were cardamon, natural gas, nickel, silver, sugar M Kol and zinc. The open interest gainers were aluminium, cardamon, copper, crude oil, lead, mentha oil, nickel, silver, sugar M Kol and zinc. The US non-strategic petroleum reserves were higher by 3.6 million barrels at the 334.8 million barrel mark, exerting downward pressure on oil prices. The oil markets appear to have calmed down after recent fears over the Iran imbroglio. And the easing US dollar is buoying commodity prices, including bullion. Silver may just turn out to be the wild card commodity in the coming weeks.

Agri commodities
Mentha Oil has sustained its uptrend as its price has attempted to test higher ground. The Rs1,600-1,625 band is likely to be a near-term resistance and needs to be watched as a potential pressure point. Existing longs may be held for now, but fresh buying is ruled out. Market internals indicate a 41% decrease in turnover and a 5% increase in open interest.

Potato has seen consolidation as the weekly chart shows an inside pattern which shows a decline in trader interest. Avoid the counter for now. Market internals indicate a 49% decrease in turnover and a 3% decrease in open interest.

Sugar M Kol: Market internals indicate a 1% increase in turnover and a 102% increase in open interest.

Metals
Aluminium has just about managed to log gains on a week-on-week basis as the weekly candle chart indicates a spinning top formation as the open and close were close to each other and the shadows were longer than the real body. These are indications of indecision in the markets as the Rs112 hurdle remains in place. Fresh buying is likely to be seen only above this threshold and bulls must await a clear breakout before initiating fresh buys. The Rs108 level will be a support area to watch. Market internals indicate a 35% decrease in turnover and a 11% increase in open interest.

Gold has closed at a five-week high on the back of an easing dollar and some safe-haven buying. The Rs28,300 level needs watching as a near-term resistance where some profit sales may be seen. A forceful breakout above this threshold will see some more upsides. Market internals indicate a 20% decrease in turnover and a 10% decrease in open interest.

Silver has closed at an 11-week high as the bulls supported prices at higher levels and the easing US dollar was another bullish factor. The Rs58,800 level will be a critical area to watch out for as a near-term resistance and a breakout there will see a bear squeeze. As long as the price stays above the Rs56,000 level, the momentum bulls are in charge of the sentiment. Market internals indicate a 1% increase in turnover and a 2% increase in open interest.

Energy
Crude oil is in a decline as the lower tops and bottoms formation confirmed the bearish outlook advocated last week. The rising inventory in the US non-strategic reserves can add some pressure in the near term and the Rs5,050 level will prove to be a near-term resistance. Avoid bargain-buying as of now as the higher open interest suggests a short build-up. Market internals indicate a 26% decrease in turnover and a 14% increase in open interest.

Natural gas was seen as being ripe for a pullback rally, which materialised last week as per expectations. The weekly candle chart indicates an engulfing pattern (daki) which has bullish implications in the absolute near term. Hold longs positions for now. Market internals indicate a 46% increase in turnover and a 29% decrease in open interest.

— The columnist is the author of A Traders Guide to Indian
Commodity Markets and invites feedback at vijay@BSPLindia.com or (0) 9323720291.

Fair disclosure: The analyst has exposure to aluminium futures discussed above