Trading strategies for crude oil and zinc by Tradebulls Securities

 

Failure of any constructive talks for the US stimulus package deal and President Donald Trump calling off negotiations with Democrats on new stimulus package deal has made buyers go for danger off mode which shot US greenback up. All asset class, particularly fairness, treasured and base metals witnessed a sell-off due to this. If there may be any additional trace of stimulus package deal, we could once more see leap in all asset class. Within the absence of main information or occasions in Asia, gold merchants will concentrate on analysing the chance elements for fast path. In doing so, Trump’s well being, fiscal stimulus, virus woes, and the Brexit are more likely to be the key phrases to watch. Traditionally, gold tends to do effectively forward of US elections and after the Chinese language “Golden Week” vacation. We imagine any severe correction in Gold can solely come under $1,850. But in addition, severe shopping for in Gold will solely come above $1,925. Until then, it’s anticipated to stay in a spread.

Silver is taking stairs on the best way up and taking elevator on the best way down. It’s close to its help zone round $23 and now we have subsequent help zone round 59,000-58,500. The current swing excessive of 62,500 is the zone that silver wants to interrupt for any upside momentum. Within the short-term, we’re nonetheless extra bearish in Silver than in Gold.

Oil costs is buying and selling within the vary of $42-$36. Whereas any rising instances of Covid-19 is placing stress on costs, but one way or the other it’s managing to seize patrons’ consideration round $36. All fundamentals level to bearish indicators like fail in stimulus speak, rising instances and placing restrictions by different international locations to cease spreading of virus and China’s gradual import. The one optimistic issue for crude oil is provide disruptions on account of a strike of oil staff in Norway and potential shut-ins within the US Gulf of Mexico on account of one other hurricane additionally supported oil costs. Retail dealer information exhibits 48.82 per cent of merchants are net-long with the ratio of merchants brief to lengthy at 1.05 to 1 and if one desires to take contrarian view, then costs could proceed to search out help as extra members are internet brief. Different good signal for crude is bettering refining margin. If refining margins are rising in cohort with a rising crude worth, it indicators one factor and one factor solely – demand is bettering.

One factor we all know proper now’s that the incoming climate pattern just isn’t going to be favorable for the bulls. We might be far more assured if money traded to $2.6/MMBtu.Medium time period oulook stays bullish although. Falling decrease 48 manufacturing and rising LNG exports will stay on monitor, pushing the market into -5+ Bcf/d deficit this winter. But when climate continues to stay bearish, then we might even see Nov Future additionally witnessing promoting stress. Two issues is required to see worth rise in NG. First is climate outlook. Watch the climate outlook to search for indicators of early heating demand and to date there isn’t a heating demand expectation until mid October. Second can be money worth response to greater LNG exports . A rebound again above $2 can be considered as very optimistic and a backside is close to for November futures.

Purchase Crude | TGT: 3,050 | Cease loss: 2,830

Crude oil has made ‘Piercing line’ candlestick sample on each day scale, which has bullish implementation. Comply with-up candle was in inexperienced and RSI_14 has additionally come close to 50 exhibiting impartial setting. Value motion has additionally come up above 20 and 50 DMA. So, we anticipate costs to check ranges of three,050 so purchase at present ranges for anticipated goal of three,050 and stoploss of two,830.

Purchase Zinc | TGT: 193 | Cease loss: 185

Zinc has made ‘Piercing Line’ Candlestick in addition to ‘Bullish Belt Maintain’ candlestick sample. Each have bullish implication and costs have converged round its brief time period transferring common of 20 and 50. RSI_14 is regular at 49 with no divergence on each day scale. We suggest lengthy positions with goal of 193 and stoploss of 185.


Disclaimer: Bhavik Patel is Sr. Technical Analyst (Commodities) at Tradebulls Securities. Views are private.

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