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The markets witnessed a higher volume week as participation levels were higher — partly due to a longer week and partly due to the return of the bullion bulls.

Base metals attracted profit sales at higher levels and asset allocation shifted towards safer havens like gold and silver. Crude oil showed resilience, even in the face of high inventory levels. This week is likely to see some more profit taking on industrial commodities, especially if the financial markets display nervousness.

The volume gainers for the last week were copper, crude oil, gold, refined soya, silver and zinc. The open interest gainers were chana, copper, crude oil, gold, mentha oil, natural gas, nickel and zinc.

Agri commodities:
Chana has finally managed to close the gap that was left on the re-listing of the commodity. For further upsides, it is critical that the commodity stays above the Rs 2,425 levels continuously on a closing basis. That will be a fresh trigger for the bulls to buy.

Mentha oil is undergoing a period of quiet consolidation which will indicate a bullish breakout only above the Rs 575-mark with forceful volumes and open interest expansion. Watch the Rs 540 levels carefully for signs of support in the coming sessions.

Potato has indicated an inside formation as the weekly chart shows profit sales above the Rs 900 levels. Technically, a decline may be seen till the Rs 800 level where a fresh view may be taken. Avoid bottom fishing for now.

Refined soya oil has recorded a twin resistance formation at the Rs 520-mark — a bar reversal and a double top — which must be overcome if fresh upsides are to be seen. Declines may see levels of Rs 485 in the coming sessions.

Metals:
Aluminium has logged profit sales for a fortnight in a row and the Rs 68 levels will need watching in the coming days as an immediate support. The Rs 74 level will be the near-term hurdle and unless the bulls overcome this threshold forcefully, the weakness is likely to remain.

Copper has displayed a reversal as the 5-week-long rally terminated. That the traded volumes have spiked higher on the declines is a sign of weakness as the bears have been participating actively. As long as the counter trades below the Rs 218 levels, the weakness will persist as per the count back principle. A breakout past the Rs 236 levels will trigger fresh buys. Fresh buying should be delayed till such a breakout occurs.

Gold has seen a double bottom formation on the daily charts near the Rs 14,000-mark which will act as a support on declines in the immediate future. The upside potential may be till the Rs 14,900-mark which is a channel top on the daily charts. Bulls may hold existing longs and even add small lots for the near-term perspective.

Nickel has indicated a triple top at the Rs 645 levels and a consistent trade below the Rs 550-mark will be a sign of distress for the bulls. Fresh longs are to be avoided for now at all costs.

Silver is likely to witness near term resistance at the Rs 21,250 levels which must be overcome forcefully and on a consistent closing basis if a valid breakout is to occur.
Zinc has reversed the weekly gains of fortnight ago and should further selling continue unabated, the Rs 65 levels will be a possibility. Fresh buys are advisable only above the Rs 76 levels and till then, lay off long positions.

Energy:

Crude oil has seen buying emerge at lower levels, though the breakout past the Rs 2,700 levels remained elusive. The coming week may see a trend develop as the last six weeks have seen an insipid range bound close. Conserve cash till a breakout is signalled above the Rs 2,700-mark.

Natural gas remains under pressure as the lower tops and bottoms formation indicates a continued decline in the near term. Only a breakout past the Rs 194 levels will trigger a buy. Bulls may put off their purchases for now.

Mandatory disclosure: The analyst has no exposure to the commodities
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