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The markets witnessed a marginal dip in turnover as the MCX logged a 2% decline in volumes and a 7% increase in open interest market wide. The fall in turnover can be attributed to the Independence Day holiday which impacted sentiments. Week-on-week turnover gainers were aluminium, copper, crude oil, crude palm oil, lead, mentha oil, nickel and zinc. The open interest gainers were almond, crude palm oil, gold, mentha oil, natural gas, refined soya oil and silver. The advance in industrials extended and profit sales were seen towards the end of the week along expected lines. The dollar/euro parity and the data announcement for the housing starts and jobless claims will set the tone this week.

Agri-commodities
Chana has witnessed a fall almost every day of the previous week and that is a sign of concern for the bulls. Though the decline was on lower volumes, the bulls are likely to await a surge past the Rs 2,400-2,425 levels before re-entering this counter. Market internals indicate a 9% decline in turnover and a 6% decline in open interest.

Mentha oil has exhibited a bar reversal as the weekly closing is below its open and the intra-week high was the recent high during its upthrust. The higher volumes and open interest seem to indicate a bias towards aggressive profit sales at higher levels. Unless the recent high at Rs 565 is overcome forcefully, expect the outlook to remain weak, watch the Rs 515 technical support. Market internals indicate a 122% increase in turnover and a 31% increase in open interest.

Refined soya oil has exhibited an inside formation as the weekly range is within the previous week’s range and the counter appears to be under pressure in the near term. The Rs 455 level will act as a near-term support and needs to be watched. Market internals indicate a 27% decline in turnover and a 2% increase in open interest.

Metals
Aluminium has witnessed profit sales near the psychological hurdle of Rs 100 which will be the near-term resistance. Bulls will enhance longs with conviction only after the 3 digit mark is overcome with force. Declines are likely to witness support at the Rs 91 levels. Market internals indicate a 2% increase in turnover and a 3% decline in open interest.

Copper ended the week with net gains, though off the intra-week highs. This metal is a bellwether within the base metals space and is likely to be the guiding beacon for its peers. As long as the red metal stays above the Rs 292 levels on a closing basis, the momentum is likely to remain upwards. Market internals indicate a 12% increase in turnover and a 6% decline in open interest as short term bulls locked in gains.

Gold is appearing to consolidate and prepare for its next big move in either direction. The Rs 15,000 overhead hurdle is likely to act as a near-term resistance and only after a forceful closing above this level, will the bulls emerge in the markets with conviction. A plethora of factors will impact the trend determination process - the dollar/euro parity, crude prices and the economic data in the coming weeks. Market internals indicate a 19% decline in turnover and a 2% increase in open interest as players adopted the buy-and-hold strategy.

Nickel has managed to log week-on-week gains though the counter has ended off its intra-week highs. The Japanese candle charts indicate a grave stone doji on the weekly chart and the bulls will have to manage to consistent close above the Rs 975 levels to manage to keep the outlook buoyant. Buy after a forceful rally. Market internals indicate a 24% increase in turnover and a 1% decline in open interest.

Silver is managing to exhibit higher relative strength as compared to gold as the higher tops and bottoms formation remains in force. The Rs 24,000 hurdle still remains valid as advocated last week. A sustained close above this hurdle will indicate a breakout and a buy trigger. Market internals indicate a 9% decline in turnover and a 1% increase in open interest.

Zinc has witnessed a bar reversal as the weekly close is below its open and the intra-week high was also the significant high in the ongoing rally. Unless the Rs 92.50 hurdle is overcome forcefully, expect the bulls to refrain from fresh longs on this counter. Market internals indicate a 5% increase in turnover and a 3% decline in open interest.

Energy
Crude oil has witnessed a double top at the Rs 3,500 levels as the bulls have been unable to push the price past this barrier. A sustained trade and close above this barrier will trigger a fresh bull move. The Rs 3,075-3,100 band will be a near-term support that needs watching. US non-strategic petroleum reserves rose by 2.5 million barrels to reach 352 million barrels, which exerted downward pressure on the commodity. Market internals indicate a 4% increase in turnover and a 6% decline in open interest.
Natural gas has plumbed towards its all time lows on the MCX and a violation of the Rs 158 support with forceful volumes will indicate a fresh pressure on the counter. Unless the Rs 190-195 hurdle is overcome, expect the bulls to refrain from longs on this counter. Market internals indicate a 27% decline in turnover and a 31% increase in open interest.

The columnist is the author of ‘A Traders Guide to Indian Commodity Markets’ and invites feedback at vijay@BSPLindia.com or (022) 23438482.

Mandatory disclosure: The analyst has exposure to bullion recommended above.