Saturday, 18 April 2015

Currency Outlook for week ending 24 April 2015

Dollar/Rupee remained in a Range


Buy around 62.45-62.40 Target 62.75 and above with stop loss below 62.38

Below 62.38 will expect to test 62.00-61.80 levels.

Important factor/data from India:


Euro edges up amid optimistic ECB outlook, weak dollar index

Recommendation /View

Buy above 68.20 Target 68.50-69.00 with stop loss 67.95.

Sell around 67.70-67.75 Target 67.00-66.50. Stop loss 68.10 (LTP: 67.4925)

Important factor/data from Europe:

Euro group Meetings on 24 April.

Sell strategy given below 65.95 levels was not initiated as after hitting low 65.96 EURINR saw more than 2.65% pullback and settled at 67.57.

This week, EURINR may show further upside move towards 68.00 levels following to a bullish piercing line pattern on weekly chart which could attract huge selling pressure in EURINR as underlying trend still negative.

Further, 68.20 will act as an immediate resistance and a valid buy entry could expect above this level.

Great British Rebounded from Five Year Low on robust UK employment data
Recommendation /View

Buy above 94.10 (LTP 93.77). Target 94.75-95.00. Stop loss 94.75.

Important factor/data from U.K.

MPC Official Bank Rate Votes on 22 April.

Sell strategy given below 92.75 levels was successful with GBPINR drop towards 91.27 levels and hit both target of 92.40-92.10 levels.

This week, GBPINR may show further bearish move towards 90.50-90.00 levels following to bullish engulfing candle stick formation on weekly chart.

Further, tensions regarding UK elections continue hold volatility in the pair.

Japanese Yen posted 0.36% gain on weak dollar


Buy around 52.50-52.55 Target 52.80-53.00. Stop loss 52.25.

Important factor/data from Japan

Trade Balance on 22 April

Weekly movement was positive in JPYINR and after hitting a low of 51.75 pair settled at 52.6275. Last week sell strategy given below 51.75 was not initiated. 

The weekly price action resulted in formation of bullish engulfing pattern which is indicating for bullishness in JPYINR. On the downside 51.75 will remain crucial support for the pair. 

Further, A total of around 1000 local elections will be held in Japan this month and Prime Minister Shinzo Abe's Liberal Democratic Party is expected to win a majority across most regions in Japan.

       High Impact Economic Data & Events Schedule during the week.

Economic Indicators
German ZEW Economic Sentiment
MPC Official Bank Rate Votes
HSBC Flash Manufacturing PMI

French Flash Manufacturing PMI

German Flash Manufacturing PMI

Retail Sales m/m

Unemployment Claims
German Ifo Business Climate

All Day
Eurogroup Meetings

Core Durable Goods Orders m/m

More will Update soon.. 

Friday, 17 April 2015

Monthly Report- Released on 15th April 2015

Image result for monthly report


April is Autism Acceptance Month. During Autism Acceptance Month, we focus on sharing positive, respectful, and accurate information about autism and autistic people. Autism Acceptance Month promotes acceptance and celebration of autistic people as family members, friends, classmates, co-workers, and community members making valuable contributions to our world. Autism is a natural variation of the human experience, and we can all create a world which values, includes, and celebrates all kinds of minds. April is the month of summer but we have witnessed rainfall in some parts of India and this is not fruitful for Indian economy. As we mentioned in our last report that unseasonal rain and thunderstorm will affect rabi crop which we will see in commodity prices; same thing is happen and we have seen sharp upside rally in all major commodity. Continue rainfall experienced last week in North India, Rajasthan and Madhya Pradesh. The bout of unseasonable rain is likely to give another blow of setback of wheat and other Rabi crops like wheat, mustard, mangoes and gram in several places including Punjab, Maharashtra and Uttar Pradesh. The crop has already suffered loss due to rain and is likely to suffer further damage due to rain over the weekend. The smashing blow of unseasonable rainfall in the hinterland has impacted major Rabi crops such as wheat, mustard, potato and other crops like mangoes and onion, threatening the already sluggish demand. Heavy and in some manner, unwanted April rain has not only impacted the harvest of staple food items but has indirectly led to a sharp rise in prices of the important leafy vegetables and pulses in parts of Northern and Western region. The hopes of bumper harvest this season and an eventual release of some debts of indebted farmers has thus transformed into woes. Parts of Punjab, Haryana and Uttar Pradesh have been the worst hit in March-April while major part of Rajasthan and Malwa also affected. Over 5 million hectares of land under wheat cultivation is adversely affected by heavy rain and strong winds. Almost 50% of the wheat and Coriander crop harvest is reported to be damaged. Even though Madhya Pradesh state governments have urged the Central government to compensate this drastic loss, action on the same is something we will have to wait and watch, while farmers stare at a potential nod to the urge as the discussions on the issue takes place in the Parliament with poor attendance from both the sides. Several parts of the Madhya Pradesh, including Ashoknagar, Neemuch, Indore, Umaria, Sidhi and Rewa, witnessed heavy hailstorm last week that severely damaged crops. “The final impact on the output of wheat and mustard will depend on how the weather holds in the next few days. Wheat, mustard and chana are the main crops grown during the rabi season in Punjab, Rajasthan, Haryana, Madhya Pradesh and Uttar Pradesh, which have witnessed heavy unseasonal rain and high winds over the past three days. In present weather condition, Jeera crop quality may harm by 40% and damage the crop by 5-10% that may decrease production more than estimate.

Last month we released report on Turmeric and Gold. Turmeric skyrocketed and made a high of 8800. We recommended buying around 7500---7300 while stop loss triggered in Gold. We recommended selling in Gold around 26200---26300 with stop loss of 26600. On NCDEX division, we have witnessed sharp rise in Dhaniya, Jeera, Chana, Rmseed, Edible oil, Turmeric, Mentha oil, Guarseed, Guargum, Barley and Wheat. Dhaniya and Chana is the most widely affected crop and will expect that this rise will remain continue in Chana till 4300---4400 while we expect consolidation phase in Dhaniya. Lower side support seen at 8600---8000 in Dhaniya while 3750 level in Chana. Traders holding long in Dhaniya and Chana can book part profit and trade with levels only

In Jeera, we indicated to buy around 15000 with stop loss of 13800 for the upside target of 17000. It skyrocketed and made a high of 18190 mark on 15th April 2015. Jeera is now trading around 18000 and has support at 16800 while resistance at 18300. Three consecutive closes + weekly close above 18300 will see further upside rally till 19500---20400+ mark in days to come. Traders holding long as per our level can book part profit and revise stop loss of 16800 on closing basis. Trend still looks positive and any sharp rise will be buying opportunity also fundamental is supportive but trade with levels only as correction due in it. Rainfall in the month of March- April affects mustard seed and Mentha oil prices too and rose sharply from lower levels. Our upside target was 3600+ and for longer period target intact of 4000---4300. It made a high of 3723 on 15th April 2015 and now trading around 3700. Rmseed has support at 3520 and resistance at 3730. Rmseed too looks positive and could test its resistance level of 3530---3580. Three consecutive closes + weekly close above 3730 will see further upside rally in Rmseed till 4000---4300+ mark in days to come. Traders holding long as per our level can book part profit and revise stop loss of 3520 on closing basis. Fresh buying can initiate in panic with strict stop loss of 3520 on closing basis.

As you all know that we were highly bullish in Mentha oil from 680 mark for the upper side target of 890+ for 2015. It skyrocketed and made a high of 993.50 on 15th April 2015 and continue to hold. Three consecutive closes + weekly close above 970 will see sharp upside rally till 1045---1070+ mark in days to come. Traders holding long in Mentha oil revise stop loss of 910 on closing basis.

As we indicated positive momentum in Edible oil and move satisfactory to our targets. We recommended buying in Soyabean at lower levels and as on 15th April 2015 made a high of 3712. Soyabean trend still looks positive. Three consecutive closes + weekly close above 3650 will see sharp upside rally till 3900---4050+ mark in days to come. Traders holding long as per our level can book part profit and revise stop loss of 3530 on closing basis for the upside target of 3900---4050.

In last few trading sessions, we have seen range bound trading in Castorseed but seems that Castorseed too transferring into positive momentum. Fresh selling can initiate only weekly close below 3500 mark. Castorseed has support at 3500 and resistance at 3750. Three consecutive closes + weekly close above 3750 will see upside rally till 4000---4200+ mark in days to come. Traders can trade with levels only and wait for conformation.

Our buying recommendation in Turmeric has proven great and made a high of 8850. Turmeric has support at 8600 and resistance at 8900. Three consecutive closes above 8900 will take to 9300---9550+ mark in days to come else it could test its support level of 8600 again. Weekly close below 8600 will take to 8300---8050 mark. Hope you booked full profit and now trade in a range with levels only and wait for conformation

We recommended positional buying in Guarseed too around 3800 with stop loss of 3500. It jumped more than 900 points in less than 15 trading sessions. Guarseed is now having support at 4500 and resistance at 4750. Close above 4750 will take to 4900---5050+ mark in days to come else it could test its support again. Further downside panic seen in only weekly close below 4500. Till then traders can trade in a range with strict stop loss and wait for conformation. Rainfall in March- April affected Barley and Wheat crop too. We already indicated in our last report to buy barley in panic which already moved 4% after our recommendation. Still looks positive and hold for the upside target of 1300 and then to 1500---1600. Wheat crop damage but global wheat production and last year ending stock are high. So we will not expect any major move but yes downside seems limited to 1400 and could test 1750---1820 mark in days to come as all eye on Crop damage while positive momentum seen technically. Marathwada farmers, already bracing to tackle severe drought, have been dealt a blow with the standing rabi crop damaged due to heavy rain and hailstorms over the past two days. 

Monthly Pick- Chana

Chana made a high of 4043 mark on 15th April 2015. Chana rallied from 3256 level and now trading around 4000 mark. Chana prices surged on reports of lower output hopes amid pickup in demand from mills. Chana prices continue to rise in next two months on lower acreage and crop damages due to unseasonal rain in major growing states. Food Minister Ram Vilas Paswan's assertion of levying import duty to restrict overseas supplies and allow pulses exports might also support chana's upward March- April. "Certainly, Chana trounced Rs 4,000 a quintal-mark once arrivals of new season crop stabilise and crop size is finally known but looking at lower estimated production based on a steep decline in sowing area. Chana kept trading below its 2013-14 minimum support price of Rs 3,100 a quintal for the most part of the year.  "Farmers did not get remunerative price last year, which resulted into lower acreage this year. An independent survey done recently reports 15-20% decline in output this year, which will support price's firmness. Mr. Paswan on December 30 said his ministry has recommended the ministry of commerce to levy 10% import duty on pulses to protect the interest of local farmers from falling prices. In the last one year, pulses prices remained subdued with occasionally falling below the minimum support price (MSP) of Rs 3,100 a quintal fixed by the government. Also, the minister recommended allowing exports of pulses which has been banned for several years. As per the ministry of agriculture, rabi pulses 2014-15 coverage till February 6 reported a decline of 9.30% to 14.29 million he as against 15.76 million he around the same time last year. The area under chana cultivation reported a sharp decline of 15.10% to 8.53 million he this year as against 10.05 million he by same time last year. In 2014, prices found very strong support at 2,500-2,600 levels. Prices continuously bounced back from those levels. On the upper side, 3,500-3,600 levels were not breached for quite some time but in 2015 breached successfully. 

 Technical View

Chana find crucial support at 3700 and resistance at 4300—4400. On seeing weekly and monthly chart, Chana still looks positive and could test 4300---4400 mark in days to come. Further upside rally seen in Chana only monthly close above 4400 mark. RSI and MACD still showing strength in Chana and any sharp panic will be buying opportunity. Chances are bright that Chana could retest 5000 level in upcoming months as formed rounding bottom pattern on weekly chart. Traders can buy and accumulate Chana in panic around 3920---3850 with stop loss of 3700 for the upside target of 4300---4400.


Traders can buy and accumulate Chana (May) around 3920---3850 with stop loss of 3700 on closing basis for the upside target of 4300---4400


Monthly Pick- Nickel

From last few weeks we have vertical crash in Nickel and made a low of 765.70 as on 14th April 2015. Nickel jumped in yesterday’s trading session from lower levels and currently trading around 790. The rise in nickel futures to a firm trend at the domestic spot markets following increased demand from alloy-makers. We have seen sharp panic in base metal due to slowdown in China. China is the world’s largest consumer of base metal. China’s exports fell by 14.6% in March, dashing predictions of a continuing rebound in the world’s second-largest economy. Figures announced by the General Administration of Customs (GAC) showed an unexpected year-on-year fall, which followed a rise of almost 49 percent in February. China’s foreign trade volume in the first three month of the year 2015 dropped by 13.5%. Imports fell too, by 12.3% in March, affected partly by falling commodity prices. The value of coal imports in particular dropped 42% in the first quarter. China’s trade surplus also fell significantly, to $3.1 billion in March, a two-year low. Nevertheless, Huang acknowledged that "downward pressures on the domestic economy have intensified," and said the world economy is still in the midst of “deep corrections” following the global financial crisis, and there was unlikely to be a “marked improvement” soon. The official Xinhua news agency added that the external environment was "still grim." Unadjusted figures showed that trade with the European Union fell 2.1% in the first quarter, though trade with the United States grew by 3.2%. Li-Gang Liu, chief economist for Greater China at ANZ Bank, said the weak import data was a sign that domestic demand had continued to slow, despite government attempts to stimulate spending. In a research note, he said this suggested that China’s overall GDP growth for the first quarter of 2015 could have dropped below the psychologically important 7% mark, possibly to 6.9%, which would be the lowest figure since the early months of the global financial crisis six years ago. Official GDP figures for the first quarter will be announced on Wednesday. China’s GDP grew by 7.4% in 2014, but the country’s leaders have predicted that it will grow by about 7% this year. The government has taken measures to encourage spending on real estate, and has cut bank reserve rates. But ANZ’s Liu warned that, with China’s long-term trade surplus keeping the Chinese currency relatively strong, there is a greater “risk of imported deflation.” Liu and other analysts predict that the government will take further stimulus measures, including another cut in reserve rates, and possibly new tax rebates to support trade growth.

However, China’s entrepreneurs continue to complain about the high cost of borrowing. Last week, one Bloomberg analyst warned of a "gloomy outlook," with serious stagnation in China’s real estate market, which he predicted could have a further impact on commodity imports. On seeing rise in global equity markets and pending US interest rate decision along with it rise in Dollar index will give support to base metal in near terms also will expect that Chinese economy will recover in next 2nd and 3rd quarter. 

Technical View

Technically, Nickel has support at 750 and resistance at 810. Nickel bounced back from lower levels and formed Gangotri pattern on weekly chart which indicates at least 25% target of the current price level. Three consecutive closes + weekly close 810 will see sharp upside rally in Nickel till $865---$890 and then to $955 mark in days to come. Downside levels seem limited in Nickel as RSI and MACD indicates negative diversion on daily chart and will expect bounce in Nickel from lower levels. Traders can buy and accumulate Nickel around 790---780 with stop loss of 750 on closing basis for the initial target of 865---890.


Traders can buy Nickel around 790---780 with stop loss of 750 on closing basis for the initial target of 865---890.