10 commodity bets for up to 14% returns this week

For the current week, traders should buy from the support level of Rs 48,800, keeping a stop loss around Rs 48,000, aiming for a target price of Rs 50,300. Gold took good support last week, however, it is facing difficulties crossing its resistance levels due to consolidation on the weekly charts. A large stimulus will lead to higher inflation but is necessary to boost the economy. Most central banks have kept interest rates at zero or low levels. Both scenarios favour the up-move in gold.

(Analyst: Kshitij Purohit, Lead-Commodities & Currency at CapitalVia Global Research Limited)

For natural gas, traders should keep an eye on the support level of Rs 187 for longs, but must keep a stop loss at Rs 180 for a target price of Rs 207. The weather is expected to be much colder in the western regions of the United States, and much warmer or normal across the eastern parts over the next two weeks. This should increase the demand for natural gas for heating purposes in the West, and lead to divergence in natural gas prices.

(Analyst: Kshitij Purohit, Lead-Commodities & Currency at CapitalVia Global Research Limited)

Traders should look at MCX Nickel futures with a sell-on-rise strategy, where we may find some selling opportunity from the previous week’s high of around Rs 1,335-1,330. The target should be around Rs 1,265–1,262.50 whereas one must maintain a stop loss above Rs 1,341. Nickel fell sharply from the levels of Rs 1,342 at the start of the previous week and we have witnessed further weakness in prices as it traded below the 15-SMA of the hourly chart placed at 1,333. Nickel is trading below the 21 days moving average which is placed at Rs 1,296 and on the downside it touched the 50-day SMA at Rs 1,270 which is the immediate support for Nickel.

(Analyst: Kshitij Purohit, Lead-Commodities & Currency at CapitalVia Global Research Limited)

In the next week, traders should go with the Sell-on-rise opportunity in the MCX Zinc futures. The optimum levels to take any sell position should be around Rs 211.30. For any such sell position, we are anticipating a target of Rs 202-200 and should keep up with a stop loss at Rs 217.45. Technically, Zinc future has traded in the Falling channel on a 4-hour chart since a few sessions. Zinc futures saw a sharp downfall as it broke below the Rs 210.90 mark at the start of the week as a total of 105,800 tonne inventory was delivered into the LME system, taking the total inventory in the bourse to the highest level since mid-2017. The immediate support in the MCX Zinc futures is the 15-SMA on a 2-hourly chart placed at Rs 205.50 whereas Rs 213 should be considered as a strong resistance.

(Analyst: Kshitij Purohit, Lead-Commodities & Currency at CapitalVia Global Research Limited)

Traders should follow the sell-on-rise strategy in the Lead futures as we have seen prices struggling to break above the resistance levels for the whole week. The correct range to make a sell position should be around Rs 162-162.25 and keep the stop loss around Rs 163.60, which is the high for the weekly candle and should go for a target of Rs 156.75. We have seen quite a big consolidation in the last couple of sessions where Lead prices have hovered between Rs 160-162 as Rs 160 should be considered as a strong support. If it weakens below this psychological support level, then next support on the intraday chart is placed at Rs 159.25. The immediate resistance would be the 21-days moving average on the daily chart placed at Rs 162.50.

(Analyst: Kshitij Purohit, Lead-Commodities & Currency at CapitalVia Global Research Limited)

Traders should look at selling the Aluminum futures at high levels. The ideal selling position should be initiated around Rs 163.20. The optimum target should be around Rs 159.20, which is the low of the tender contract for this week, and keep a stop loss around Rs 165.40. Aluminum prices remained negative as we have seen double-top formation on the hourly charts where the resistance is seen around Rs 163.85-163.45 range. Since the price has made multiple dips around Rs 160.80-160.75, it’s likely to see a sell from higher levels and Rs 160.50 should be considered as the support breakout level for this formation.

(Analyst: Kshitij Purohit, Lead-Commodities & Currency at CapitalVia Global Research Limited)

Buy MCX Silver (March Contract) between Rs 67,500 and 68,000 for a target price of Rs 71,800 with a stop loss at Rs 66,000. MCX Silver is finally out of the range after remaining in a consolidative phase. Silver was trading in a range of Rs 67,500-65,000 for the past few sessions. Its price went on to hit a high, close to the double top resistance near Rs 71,700-71,800. The trend has now turned mildly bullish as resistance at Rs 67,500 has now turned into support. The Relative Strength Index has been trading above the 50 mark, supporting the bull case. Corrective dips towards Rs 67,500-68,000 would attract buying for an immediate objective of Rs 71,700-71,800. As Rs 71,800 is a multiple trend line resistance, a closing break above Rs 72,000 might extend the upside towards Rs 74,000. A positive bias would fade on a closing below Rs 66,000.

(Analyst: Ravindra Rao, VP- Head Commodity Research at Kotak Securities)

Sell MCX crude oil (February contract) around Rs 3,900 for a target price of Rs 3,700, with a stop loss at Rs 3,980. The counter has been struggling to sustain above Rs 3,900 as selling is witnessed at higher levels. A black spinning top formation, followed by two downside gapping candles, has given bears an edge. Resistance is placed near the 3,980 zone. A daily closing above the Rs 3,980 level might give a higher push to the prices. Till then, bears are expected to dominate with an objective of Rs 3,680 on the lower side.

(Analyst: Ravindra Rao, VP- Head Commodity Research at Kotak Securities)

Buy copper (February) above Rs 610 for a target price of Rs 630/645 with a stop loss below Rs 595. Copper prices have been trading below the 20-MA level on the daily chart -- which is now placed near Rs 610-- for the past few days. On the weekly chart, there is still strength in the trend. So there is a possibility of prices breaking on the higher side next week. On the downside, Rs 585 is the immediate support. Any break below this level may see the prices heading lower.

(Analyst: NS Ramaswamy, Head of Commodities at Ventura Securities Limited.)

Turmeric has broken above the 100-EMA level -- now placed near Rs 6,100 -- on the weekly chart, and is sustaining above that level. Also, on the weekly chart, the prices have broken above their key resistance levels, which suggests an upward move. Buy turmeric (April) in the range of Rs 6,550 to 6,500 for a target price of Rs 7,200/7,500 with a stop loss below Rs 5,900.

(Analyst: NS Ramaswamy, Head of Commodities at Ventura Securities Limited.