Archive for May, 2014

Commodity Technical Outlook

Posted: May 30, 2014 in Uncategorized

GOLD
Gold prices traded below $1,300 in a consolidated mode due to fall in spot gold prices as the physical demand weaken in top buyer china and dollar strengthening. Economic optimism about the US economy and continues outflows from the SPDR gold trust exerted downside pressure on prices.
Forecast
Gold is expected to trade in a consolidate range from 1250 to 1300.

SILVER
Silver prices were traded in downside pressure this week due to weaken Gold prices, strong Dollar and ease of geopolitical tensions. US and UK markets were closed restricted the participation in turn leading to flat volumes in international and domestic markets.
Forecast
Silver prices is trading in a sideways and expected to between 19.00 to 20.00.

CRUDE
Crude Oil was in a down trend whole week followed by marginal profit booking as per API and EIA inventory forecast in the week ending. In Libya, the crude output still remains a question mark as production at major oilfields are still at halt raising concerns on the supply side.
Forecast
Crude is trading in an upside correction and is expected to cross the level of 105.
DAY’s RANGE FOR 2ND JUNE

COMMODITY S1 S2 R1 R2
GOLD 1250 1240 1265 1280
SILVER 18.80 18.40 19.50 20.00
CRUDE 102.50 101.75 103.50 104.50

WEEK’S HIGHLIGHT

  • US Prelim GDP declined by 1% in first quarter of 2014.
  • LME Copper inventories gained 1.5% yesterday.
  • FII inflows jump to Rs.14446.80 crores in May.
  • US Pending Home Sales grew at slow pace of 0.4% in April.
  • US economic growth estimated at negative 0.6% for Q1 2014.
  • LME Copper inventories plunged by 3.8% yesterday.
  • German Unemployment Change rose to 24,000 in the last month.
  • UK’s CBI Realized Sales slumped to 16-mark in the month of May.
  • Japan’s Retail Sales dropped by 4.4% in the previous month.
  • US Core Durable Goods Orders grew by 0.1% in last month.
  • Crude oil inventories expected to gain by 0.7 mn bbl.
  • UK’s BBA Mortgage Approvals declined by 3,700 to 42,200 in April.
  • US CB Consumer Confidence grew by 1.3 points to 83-mark in May.
  • India’s CAD narrows to deficit of $30.7 billion in Q1 of 2014.
  • Pro-west candidate’s win in Ukraine may reduce gold’s safe haven.
  • US markets were closed yesterday on the eve of Memorial Day.
  • GfK German Consumer Climate unchanged at 8.5-mark in May.
  • US Banks closed today on the observance of Memorial Day.
  • German Ifo Business Climate fell to 110.4-mark in month of May.
  • US New Home Sales increased by 26,000 to 433,000 in last month.
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GOLD
Holdings of SPDR GOLD Trust GLD ETF rose 1.08% to 785.89 tonnes yesterday. Spot gold prices declined by more than 2 % in yesterday’s trading session as S&P equities index traded at high levels in the US. Economic optimism about the US economy also triggered heavy bout of selling. Expectations of rate cuts by the European Central Bank stoked investor‘s appetite for equities. Also, orders for U.S.-made durable goods unexpectedly rose in April and consumer confidence perked up in May that rebound economic growth.
Forecast
Precious metals fell 2% in yesterday’s trading session, the most in one day since December. Precious metals are trading lower on COMEX today. We expect prices to trade in consolidate phase.
SILVER
Holdings of New York’s iShares Silver Trust SLV marked at 10,284.40. Taking cues from weakness in gold prices even spot silver prices declined by more than 1.5% and closed at $19.1/oz.
Forecast
On an intraday basis silver prices are expected to trade lower as hopes ECB will add stimulus measures to boost the economy led to strength in the dollar exerting downside pressure on prices. Besides, good economic data from the US also led to decline in the bullions safe havens status acting as a negative factor.
CRUDE
Crude edged lower yesterday with prices supported by violence in Ukraine and expectations for a draw on U.S. crude stocks. Oil exports from Iraq’s southern terminals are on track for a record high in May which accelerates supply growth in 2014 after a slowdown last year. U.S. commercial crude oil stocks and refined product inventories were expected to have risen in the week to May 23.
Forecast
Crude is seen trading at $104.21 and likely that the prices may remain higher with very strong gains in the Asian equity markets. According to US DoE crude slipped 7.23 million barrels to 391.3 million for the week ended May 16. Today Crude may take some corrections.
TODAY’S DAY RANGE

COMMODITY S1 S2 R1 R2
GOLD 1257 1250 1271 1380
SILVER 18.90 18.80 19.30 19.50
CRUDE 103.50 102.70 105.00 105.90

DAY’S HIGHLIGHT

  • US Core Durable Goods Orders grew by 0.1% in last month.
  • API crude oil inventories expected to gain by 0.7 mn bbl.
  • UK’s BBA Mortgage Approvals declined by 3,700 to 42,200 in April.
  • US CB Consumer Confidence grew by 1.3 points to 83-mark in May.

Market Review for STI:
STI opened 5 points up @3283.76 and was in a consolidation phase throught the day , the high of 3291.83 was marked on the chart and today’s closing was @3282.88
A red candle was formed for the day with high upper shadow,small lower shadow and a small real body.

STI Day Performance
Open 3283.76
High 3291.83
Low 3278.35
Close 3282.88
Change(Points) 4.8
% Change 0.15%
Volume 1635.1M
Rise 227
Fall 170
Unch 386

Market forecast for STI:
STI closed higher than the previous day with a red candle and still continues its major trend .The volume indicates that the buyers are aggressive and may take the prices up for the next day.

STI LEVELS
Support 1 3275
Support 2 3265
Support 3 3250
Resistance 1 3290
Resistance 2 3299
Resistance 3 3315

Important Factor for today:-

  • Q & M Dental Group (Singapore) LTD announced that controlling shareholder Quan Min Holdings (QMH) and substantial shareholders, Kelvin Koh and Felicia Koh have agreed to sell a combined 10% stake to Heritas Helios Investments (HHI). The dental group has signed a call option with HHI, under this Q&M will issue 63 million new shares within a 2-year option period for a minimum exercise price of S$0.48 per share.
  • GOODPACK LTD seeking to stop trading of its shares, sparking update that KKR & Co might be close to making a takeover offer for the Singapore-listed packaging company.
  • HANKORE Environment Tech Group announced that China Ever bright Water Investments Limited (CEWIL) is about to start its waste water treatment operations into the company.
Top Gainers Top Loosers
Scrip Name CMP %change Scrip Name CMP %change
HPH Trust USD 0.735 2.08 Scrip Name CMP %change
SingTel 3.87 0.78 ComfortDelGro 2.31 -2.94
Noble 1.32 0.76 CapitaLand 3.18 -0.94
Sembcorp Marine 4.06 0.74 Jardine C&C 45.06 -0.62
UOB 22.5 0.67 HongkongLand USD 7.04 -0.56

Market Review for KLCI:
Today KLCI opened down @1868.23 from its previous close of 1869.22.The major trend is up but from the past five days the trend is down and followed the same trend today made a low of 1862.27 and high of 1871.14.

KLCI Day Performance
Open 1868.23
High 1871.14
Low 1862.27
Close 1862.8
Change(Points) -6.4
% Change -0.34%
Volume 1440.7M
Rise 272
Fall 520
Unch 834

Market forecast for KLCI:
A red candle was formed for the day with a small lower shadow a real body and a upper shadow which shows that the bearish trend is still in continuation .It is expected to continue its trend for the next day .

KLCI LEVELS
Support 1 1855
Support 2 1845
Support 3 1835
Resistance 1 1870
Resistance 2 1880
Resistance 3 1890

 

Top Gainers Top Loosers
Scrip Name CMP %change Scrip Name CMP %change
TM 6.31 1.61 MAXIS 6.66 -3.48
DIGI 5.45 0.93 PPB 15.78 -1.99
PETGAS 24.5 0.66 IOICORP 4.95 -1.98
YTL 1.74 0.58 ASTRO 3.44 -1.71
GENM 4.24 0.47 FGV 4.54 -1.3

GOLD
With rising equities in the US, gold prices trading below the $1300 mark forced prices further as bullions safe haven appeal has been reducing by rise in other asset class. Besides this, lack in physical demand also pulled back prices. According to the World Gold Council consumer gold demand in the world’s biggest buyer China fell 18% to 263.2 tonnes, with Chinese demand for gold coins and bars down 55% in Q1, offset only partially by a 10% rise in jewellery off take.
Coming to the investment demand, gold holdings at the world’s largest gold ETF, the SPDR gold trust has been continuously declining and in the week it has fallen from 782 tons to 776 tons indicating the demand is very much feeble for the underlying in the near term.
Forecast
We expect gold prices to trade lower as physical demand seems to be weak across global and Asian markets. Besides outflows from the SPDR continues to have negative influence on the investors exerting downside pressure on prices.
SILVER
Spot silver prices gained marginally in the last week taking flat cues from international gold prices. However, strong gains in Nickel prices by more than 3% also supported prices.
According to data from the Commodity Futures Trading Commission, Hedge funds and money managers cut their bullish bets in gold futures and options and switched to a net short position in silver in the week to May 20. ETF Holdings of New York’s iShares Silver Trust SLV, stood at 10,284.40 tonnes from previous business day.
Forecast
Silver is trading lower on COMEX today. We expect prices to trade lower on account of ETF selling and in hope of improving US economy. Also, the Fed’s minutes stated that bond buying programme will soon come to an end although the time frame was not decided when the Fed will do it. In addition, prices will continue to be under pressure
CRUDE
NYMEX crude oil prices traded on a positive note last week as Libya’s major western oilfields, El Sharara and El Feel remained shut for a week resulting sharp decline in National output at 210,000 barrels per day (bpd), far below the 1.4 million bpd produced until mid-2013. Besides this the conflict in Ukraine is supporting oil, as U.S. President Barack Obama and French President Francois Hollande warned Russia faced significant new sanctions if it continues provocative and destabilizing behaviour. Along with this China’s factory sector performance has been up to the mark in five months in May, and recovery in US housing market as U.S. home re-sales rose in April.
WTI Crude oil prices touched a weekly high of $104.5/bbl and closed at $104.35/bbl gaining by around 2.2% in the last week.
Forecast
On an intraday basis, we expect crude prices to trade sideways after its positive trend in last week. Upswing in violence in Libya, good economic data coming out of China and the US will support prices. Besides this the inventory withdrawal indicates the summer demand to enter from all quarters of US after memorial day.
TODAY’S DAY RANGE

COMMODITY S1 S2 R1 R2
GOLD 1285 1280 1301 1306
SILVER 19.3 19.1 19.5 19.7
CRUDE 103.7 103 105 105.7

DAY’S HIGHLIGHT

  • US Banks closed today on the observance of Memorial Day.
  • German Ifo Business Climate fell to 110.4-mark in month of May.
  • US New Home Sales increased by 26,000 to 433,000 in last month.

Data Update for 26th May 2014

Time Currency Impact Particular Actual Forecast Previous
4:15am NZD High Trade Balance 534M 636M 935M
5:20am JPY Monetary Policy Meeting Minutes
11:30am EUR GfK German Consumer Climate 8.5 8.5 8.5
All Day GBP Bank Holiday
1:30pm EUR High ECB President Draghi Speaks
All Day USD Bank Holiday

Weekly Technical view on STI
Weekly wrap of STI: STI formed a Green candle for this week and performed well A Hammer pattern was formed for the week. And STI was able to sustain itself above the level of 3260 A range of 27 points was covered by STI in this week .
Technically the counter has a good support @3251 and the resistance of 3303 where the 50 Days EMA is 3169 & 20 Days EMA is showing 3190.

Support 1 Support 2 Support 3 Resistance 1 Resistance 2 Resistance 3
3265 3245 3220 3290 3315 3330

Macroeconomic factors:

  • Housing & Development Board (HDB) launched 6,454 public flats in May, which includes mature and non-mature towns and estates. Total 9707 units are offered this year.
  • In China, the manufacturing activities sharply improved and hit its 5 months high.
  • The Singapore economy grew 4.9% in Q1 of 2014, slightly lower than the government’s April estimate of 5.1%.
  • 1 Domestic wholesale trade in Singapore declined 2.8% due to the weaken domestic sales in petroleum and petroleum products as well as telecommunications and computers sectors (7.6% and 13.4% in domestic sales respectively).
  • Singapore’s Industrial Sector grew 9.8% in Q1 faster than the 7% expansion in the previous quarter.
  • Singapore’s Government focused on its growth forecasts for both total trade and non-oil domestic exports at 1.0-3.0% in 2014.
STRAIT TIMES WEEKLY WRAP
OPEN 3262
HIGH 3279.53
LOW 3252.48
CLOSE 3278.02
CHANGE (In Points) -15.43
% CHANGE -0.47%

Market Forecast for week ahead: Technically STI looks like it would taste for the new resistance and can approach for the level of 3310 global economic factor & market sentiment will cause the major change in the price value of STI.
Technical Indicators: Signal line @14.79 of MACD is above the difference line @33.75 where RSI is at 62.70 CCI is performing at 109.60

Weekly Technical view on KLCI

Support 1 Support 2 Support 3 Resistance 1 Resistance 2 Resistance 3
1850 1840 1820 1880 1890 1910

Weekly wrap of KLCI: KLCI formed a Long Red candle for the week currently KLCI is standing at the major support of 1860 where it opened at 1884.88 and made a high of 1889.47, made a low of 1866.34.
A Long Red candle was formed for the week with a little upper and lower shadow with a long real body where the RSI is above the centre line @61.63 & CCI is 120.12.
Market Forecast for week ahead:

  • Technical Indicator MACD difference line is above the Signal line so buying is expected in KLCI
  • A bit correction took place in this week and now we expect that some upside will take place.
KLCI WEEKLY WRAP
OPEN 1884.88
HIGH 1889.47
LOW 1866.34
CLOSE 1869.22
CHANGE (In Points) 14.12
% CHANGE 0.74%

GOLD
Holdings of the SPDR Gold Trust fell 3.3 tonnes to 776.89 tonnes on Wednesday, the lowest since December 2008. The outflow was the biggest since April 30. Though Gold prices in the international markets gained Yesterday as the minutes from the Federal Reserve suggested that central bank would note raised interest rates soon.Forecast
Gold price are expected to trade in the consolidate range.
SILVER
ETF Holdings of New York’s iShares Silver Trust SLV, fell by 35.86 tonnes stood at 10,284.40 tonnes from previous business day.
Spot silver prices rose by 0.4% in yesterday’s trade diverging from the gains in gold prices. A sharp upside was capped on account of strength in the DX.Forecast
Silver prices are expected to trade consolidate in a range.
CRUDE
NYMEX CRUDE ended lower yesterday on profit booking after the rally a day before by ongoing violence in Libya and positive economic data in China and the United States. Prices fell after the release of the weekly Jobs numbers from the US which increased to 326,000, higher than markets estimates of 310,000. Along with this some selling pressure was also seen in the market. WTI crude fell 0.3% to 103.75 barrel as data came from US on housing and jobs too came weaker than expected. ICE Brent also pulled back some gains close to $110.40 barrel.
Overall though broad bullishness remains in the US crude which took strong upward momentum out of the better stocks data recently. As also reported earlier, DoE said crude stockpiles fell 7.2 million barrels to 391.3 million for the week ended May 16.
Overall a broad bullishness is seen in the US crude which took strong upward momentum. According to the DOE crude stockpiles fell 7.2 M barrels to 391.3 M for the week ended May 16.
There are some positive signs for demand in gasoline consumption as the demand in market over the past four weeks increased to 8.94 MBPD, its highest level since November and up 5.3% on a YoY comparison. So refiners churn more oil for producing gasoline.Forecast
Crude oil prices could trade sideways.
TODAY’S DAY RANGE

COMMODITY S1 S2 R1 R2
GOLD 1290 1280 1298 1310
SILVER 19.00 18.50 20.00 20.50
CRUDE 103 102.50 104 104.50

DAY’S HIGHLIGHT

  • US Unemployment Claims rose to 326,000 for w/e on 16th Apr’14.
  • Euro Zone Manufacturing PMI fell to 52.5-mark in current month.
  • SPDR Gold holdings fell 3.3 tonnes to 776.89 tonnes on Wednesday.
  • UK’s Second Estimate GDP unchanged at 0.8 percent in Q1 of 2014.

Data Update for 23th May 2014

Time Currency Particular Actual Forecast Previous
7:30am CNY CB Leading Index m/m 0.90% 1.10%
11:30am EUR German Final GDP q/q 0.80% 0.80%
1:30pm EUR German Ifo Business Climate 111 111.2
EUR Italian Retail Sales m/m 0.30% -0.20%
Day 2 EUR European Parliamentary Elections
6:00pm CAD Core CPI m/m 0.20% 0.30%
CAD CPI m/m 0.30% 0.60%
6:30pm EUR Belgian NBB Business Climate -4.7 -4.6
7:30pm USD New Home Sales 426K 384K

Market Review for STI:
STI opened down by 5 points @ 3260.27 then it made a low of 3254.54 and took support with the closing at 3261.78.

STI Day Performance
Open 3260.27
High 3262.31
Low 3254.54
Close 3261.78
Change(Points) -3.96
% Change -0.11%
Volume 1149M
Rise 188
Fall 188
Unch 409

Market forecast for STI:
A Green candle was formed for the day with a small real body and no upper & little lower shadow. A Hammer pattern was formed for the day. we expect some consolidate range for tomorrow.

STI LEVELS
Support 1 3255
Support 2 3245
Support 3 3235
Resistance 1 3270
Resistance 2 3280
Resistance 3 3290

Important Factor for today:-

  • Yoma Strategic faced a 45% drop in Q4 net profit to S$6.4 million with rise in revenue of 34% to S$27.5 million, supported by sales of residences and land development rights.
  • Singapore’s central bank has warned investors about the risks posed by buying property overseas, as high house prices results in growing a number of its residents to invest in real estate abroad.
  • ComfortDelgro and SMRT may face competition in Singapore’s taxi market as new entrants like GrabTaxi and MoobiTaxi armed with their app-based business models that channel passengers to taxi drivers, may be beneficial to all operators in the long run.
  • TA Corporations (Property & Construction Group) announced a secured land tender for a 9,200-bed worker accommodation facility for S$113.9 million.
  • Today Two Marine companies announced secured contracts. Sembcorp Marine’s unit, Jurong Shipyard, has secured a US$236 million (S$296 million) contract with Hercules North Sea Ltd.
  • VALUETRONICS counters and Phillip capital extended gains Yesterday afternoon.
Top Gainers Top Loosers
Scrip Name CMP %change Scrip Name CMP %change
SIA 10.3 1.08 ComfortDelGro 2.3 -3.36
DBS 17 0.95 Global Logistic 2.8 -1.41
Sembcorp Marine 3.98 0.76 JMH 400 USD 59.59 -1.01
Keppel Corp 10.66 0.66 UOB 22.45 -0.8
CapitaLand 3.14 0.64 Genting Sing 1.33 -0.75

Market Review for KLCI:
Today KLCI opened flat today at 1881.83 and closed at 1887.03 where the low of the day was 1874.14 where the high was marked at 1882.27.

KLCI Day Performance
Open 1881.83
High 1882.27
Low 1874.14
Close 1887.03
Change(Points) -4.13
% Change -0.22%
Volume 1878M
Rise 293
Fall 502
Unch 833

Market forecast for KLCI:
A Long Red Candle was formed for the day, KLCI was in a down trend from last two days and a hammer candle was formed for the day.

KLCI LEVELS
Support 1 1880
Support 2 1870
Support 3 1860
Resistance 1 1895
Resistance 2 1898
Resistance 3 1908

We expect some pull back for tomorrow.

Top Gainers Top Loosers
Scrip Name CMP %change Scrip Name CMP %change
YTL 1.77 4.12 PETDAG 23.7 -4.36
ASTRO 3.41 0.89 FGV 4.53 -1.09
PETGAS 24.18 0.58 MAYBANK 9.9 -0.7
GENTING 9.81 0.51 TENAGA 12.2 -0.65
IOIPG 2.64 0.38 PBBANK 19.76 -0.5