Weekly Economic Data for the week 23-Nov-13 to 29-Nov-13.

Exp.:	Expected or Anticipated value calculated from the recent survey conducted.
Prior:	Represents the last actual for each indicator. In case there is a revision to the last actual, the prior column reflects the prior figure as revised.
Exp. change today:	Exp. - Prior
Avg. change of last 1 year:	Average Change in Actual data calculated for last 1 year.
Expected impact on price:	This indicator shows the effect of the anticipation of data on the prices of related country’s major indices. We have categorized it as below: Very Good Good Neutral Bad Very Bad
Actual:	Refers to the actual/latest figures after its release.

Data for the week 23-Nov-13 to 29-Nov-13

Date	Time (IST)	Country	Data	Exp.	Prior	Exp. chg today	Avg. chg of last 1 year	Exp. Impact on Price
25-Nov-2013	04-30 PM	European Monetary Union	EU to Propose Tightening Corporate Tax Legislation
26-Nov-2013	05-20 AM	Japan	Bank of Japan Releases Minutes from Oct 31 Meeting
26-Nov-2013	08-30 PM	United States	Consumer Confidence	72.4	71.2	1.20	4.00	Neutral
27-Nov-2013	03-00 PM	United Kingdom	Gross Domestic Product (QoQ)	0.8%	0.8%	0.00%	0.66	Neutral
27-Nov-2013	07-00 PM	United States	Durable Goods Orders	-1.9%	3.7%	-5.60%	6.72	Neutral
27-Nov-2013	08-25 PM	United States	Reuters/Michigan Consumer Sentiment Index	73	72	1.00	2.48	Neutral
27-Nov-2013	09-00 PM	United States	EIA Crude Oil Stocks change		0.375M		3.45
27-Nov-2013	10-30 PM	United States	EIA Natural Gas Storage change		-45B		33.60
28-Nov-2013	02-30 PM	European Monetary Union	M3 Money Supply (3m)	2%	2.2%	-0.20%	0.18	Bad
28-Nov-2013	03-30 PM	European Monetary Union	Consumer Confidence	-15.4	-15.4	0.00	1.05	Neutral
28-Nov-2013	04-00 PM	United Kingdom	Financial Stability Report
29-Nov-2013	12-30 PM	United Kingdom	Nationwide House PX MoM
29-Nov-2013	03-30 PM	European Monetary Union	Unemployment Rate	12.2%	12.2%	0.00%	0.12	Neutral
29-Nov-2013	05-30 PM	India	Gross Domestic Product Quarterly (YoY)	4.6%	4.4%	0.20%	0.45	Neutral

Technical Analysis - MCX Copper, Nickel, Lead, Crude Oil & Natural Gas.

Copper (Rs 444)

The MCX copper declined below Rs 440 last week. But taking support from the 200-day moving average (currently at Rs 428.8), it jumped back. Now, it is close to the resistance zone of Rs 448-457. If the contract can sustain above Rs 440, a rise to test this resistance zone looks possible, but it may not breach Rs 457. On the other hand, a decline below Rs 440 can take the price lower to test the 200-day moving average again.

The medium-term outlook is bearish for a fall to Rs 400. A strong break below the support at Rs 428 can trigger this fall. Key resistances are at Rs 460 and Rs 470

Crude oil (Rs 5,992)

The MCX crude oil contract has risen well from the low of Rs 5,752 last week. The contract looks to be gearing up for a corrective rally. Immediate support is at Rs 5,900. The contract can rise to Rs 6,250 in the coming week on breach of the intermediate resistance at Rs 6,100. An eventual break above Rs 6,250 can take the price further higher to Rs 6,550. For the medium-term, Rs 6,600 will be key resistance level. Whether this resistance holds or gets broken during this corrective rally will then decide the trend.

Natural gas (Rs 235)

The MCX natural gas contract is heading towards the upper end of its short-term sideways range of Rs 210-240. Failure to breach Rs 240 can result in a decline to Rs 220 and the contract can retain this range for the next few weeks. However, the medium-term outlook is bullish as the contract has been moving in a bull channel for more than a year. The channel support is at Rs 200. As such, declines to the Rs 210-200 zone can attract fresh buying interest in the market. A bullish breakout above Rs 240 can take the price higher to Rs 270.

Nickel (Rs 844)

After the sharp fall below the 200-day moving average on Monday, the MCX nickel contract stayed flat between Rs 840 and Rs 855 for the rest of the week. The short-term outlook is bearish with the 200-day moving average resistance at Rs 861. Although there is support at Rs 840, the contract looks vulnerable to break this support and decline to Rs 800. The medium-term outlook is also bearish as long as the contract trades below the key resistance at Rs 900. The medium-term target will be Rs 740 on a breach of the key support at Rs 800.

Lead (Rs 131)

The MCX lead contract recovered very well from the intra-week low of Rs 127.6 to close flat for the week. Immediate resistance is at Rs 133, a breach of which can take the price further higher to Rs 136 for the short-term. Short-term support is at Rs 128 and at Rs 125. However, the medium-term outlook is bearish. A strong break above the key resistance at Rs 136 is required to turn the outlook positive. While below this resistance, the contract can decline to Rs 115 in the medium-term. As such, fresh selling can emerge on the short-term rallies to Rs 136.

Weak outlook for Gold, Rupee is the key.

The bear market in gold is getting ferocious with the yellow metal moving steadily lower with every passing week. At $1,241/ounce, gold was down 3.6 per cent in the spot market last week. The minutes of the Federal Open Market Committee meeting that came during the week hinted that a consistent improvement in economic data would warrant trimming of the stimulus measures.

Also, the number of new claims for jobless benefits in the US fell sharply to 323,000 in the week-ended November 16, down 21,000 that was far steeper than expected, signalling a strong recovery in the labour market.

Holdings in the SPDR Gold trust — the world’s largest gold-backed exchange traded fund, continued to drop. Last week investors of the fund sold nine tonnes of gold and the fund’s holding was reported at 856.7 tonnes. The fund had a holding of 1,350 tonnes of gold in January this year.

In the domestic market, gold imports haven’t kicked off. The metal continues to sell at a premium to international gold. Demand for gold ETFs continues to be lacklustre. Daily volumes in goldBeES — the largest domestic gold ETF — in the week ending November 22 was 20,000 units, down 40 per cent over the average in the previous two weeks.

MCX gold dropped 1.6 per cent last week and closed at Rs 29,848/10 gram. MCX silver too closed with losses at Rs 44,547/100 gram, down five per cent. Daily volumes in MCX gold contracts averaged at 78,000 contracts in the week, improving from the previous fortnight average of 60,000 contracts.

DATA WATCH

Over the next two weeks, the new home sales data, jobless claims and producer price index are to be released in the US. On December 5, the second estimate of the GDP growth (for September quarter) based on more complete data will be released. Each of these is crucial to know how soon the Fed will start tapering its stimulus measures. If the Federal Reserve begins to scale back stimulus, interest rates would rise in the US. This would make gold less attractive compared with the US dollar. Domestic market gold traders would have to keep an eye on rupee movements. Gold has been holding up at Rs 29,000 to 30,000/10 gram only because of the weak rupee. If the rupee changes direction, gains on the metal will start to evaporate.

The rupee has been losing on two counts — one, the outflows from the equities market and two, the strengthening of the greenback on indications of tapering by the Federal Reserve. The dollar index has moved from a low of 78.99 in October to 80.7 now.

Gold-silver ratio is inching up — from 58 a few weeks back, it is at 62.4 now. Normally, the gold-silver ratio and gold/silver prices move in opposite directions. With the ratio now heading towards 70-72, it looks like there is more pain for gold and silver going ahead. In the last fortnight, gold behaved in a manner that we had forecast and cut the support at $1,283 and $1,250. In the coming two weeks, it may drop further to hit the June low of $1,187.90. The first support, however, could be at $1,220.

MCX gold has been moving sideways between Rs 29,000 and Rs 30,000/10 gram. If the rupee weakens against the dollar in the coming weeks, the contract may rise to touch Rs 30,900 and Rs 31,160. On the downside, supports are at Rs 29,400 and Rs 28,270.

MCX silver hit support at Rs 46,953 as we had forecast and is heading further down. In the coming weeks, it can test Rs 43,500 and Rs 41,400.

Weekly Economic Data for the week 16-Nov-13 to 22-Nov-13

Exp.:	Expected or Anticipated value calculated from the recent survey conducted.
Prior:	Represents the last actual for each indicator. In case there is a revision to the last actual, the prior column reflects the prior figure as revised.
Exp. change today:	Exp. - Prior
Avg. change of last 1 year:	Average Change in Actual data calculated for last 1 year.
Expected impact on price:	This indicator shows the effect of the anticipation of data on the prices of related country’s major indices. We have categorized it as below: Very Good Good Neutral Bad Very Bad
Actual:	Refers to the actual/latest figures after its release.

Data for the week 16-Nov-13 to 22-Nov-13

Date	Time (IST)	Country	Data	Exp.	Prior	Exp. chg today	Avg. chg of last 1 year	Exp. Impact on Price
18-Nov-2013	-	European Monetary Union	EU Foreign Ministers Hold Meeting in Brussels
18-22 Nov-2013	-	European Monetary Union	Frankfurt Euro Finance Week
18-Nov-2013	03-30 PM	European Monetary Union	Trade Balance s.a.	€13.0B	€12.3B	0.70€	2.05	Neutral
19-Nov-2013	06-00 PM	Australia	RBA Policy Meeting - November Minutes
19-Nov-2013	03-30 PM	Germany	ZEW Survey - Economic Sentiment	54	52.8	1.20	12.25	Neutral
19-Nov-2013	03-30 PM	Germany	ZEW Survey - Current Situation	30.9	29.7	1.20	5.46	Neutral
20-Nov-2013	05-30 AM	United States	Fed's Bernanke Speech
20-Nov-2013	03-00 PM	United Kingdom	Bank of England Minutes
20-Nov-2013	07-00 PM	United States	Consumer Price Index (YoY)	1.0%	1.2%	-0.20%	0.25	Neutral
20-Nov-2013	07-00 PM	United States	Retail Sales (MoM)	0.00%	-0.1%	0.10%	0.63	Neutral
20-Nov-2013	08-30 PM	United States	Existing Home Sales (MoM)	5.15M	5.29M	-0.14	0.16	Neutral
20-Nov-2013	09-00 PM	United States	EIA Crude Oil Stocks change		2.64M		3.45
21-Nov-2013	-	Germany	Merkel, Draghi, Weidmann Speak in Berlin
21-22 Nov-2013	-	China	EU-China Summit in Beijing
21-Nov-2013	00-30 AM	United States	FOMC Minutes
21-Nov-2013	08-30 AM	Japan	Bank of Japan Governor Kuroda Press Conference
21-Nov-2013	02-28 PM	European Monetary Union	Markit Manufacturing PMI	51.5	51.3	0.20	0.80	Neutral
21-Nov-2013	02-35 PM	Australia	RBA Governor Glenn Stevens Gives Speech in Sydney
21-Nov-2013	03-30 PM	European Monetary Union	ECB President Draghi speaks in Berlin
21-Nov-2013	07-00 PM	United States	Producer Price Index (YoY)	0.3%	0.3%	0.00%	0.63	Neutral
21-Nov-2013	08-30 PM	European Monetary Union	Consumer Confidence	-14	-14.5	0.50	1.04	Neutral
21-Nov-2013	09-00 PM	United States	EIA Natural Gas Storage change		20B		33.60
22-Nov-2013	02-30 PM	Germany	IFO - Business Climate	107.7	107.4	0.30	1.26	Neutral
22-Nov-2013	07-30 PM	European Monetary Union	Euro-area Finance Ministers Meet on Bloc Budgets

The Magic Of Fibonacci

The most common method in which the Fibonacci numbers are used in trading stocks is through Fibonacci retracement. The retracement levels are based on these ratios; 0.236, 0.382 and 0.618.

There are many in the trading fraternity who swear by the Fibonacci numbers.

Those who have not yet been exposed to this wonder-world can benefit greatly by a smattering of understanding of these numbers, for the stock prices seem to have a great affinity to them.

Leonardo Fibonacci, the Italian mathematician popularised the number sequence called the Fibonacci series through his book Liber Abaci published in the 13{+t}{+h} century.

In this book he used the example of sequence in which rabbits multiply to arrive at the series: 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144……

Each successive number in this series is the sum of two preceding numbers.

If we divide one number in the series by the number to the right of it, we get the ratio 0.618.

If a number is divided by the number to its left, we get 1.618. A lot has been written about the significance of the golden ratio (1.618) and its recurrence in nature; in the spiral of galaxies, sea shells, sub-divisions of the human body and so on.

Nature seems to have a preference for the numbers in the Fibonacci series and they are seen in patterns in sunflower seeds, pine cones, petals in flowers, branches in a tree and so on.

It should therefore not surprise a market observer that these numbers are useful in forecasting turning points in stock market as well.

Why is that so? As explained before, human emotions are what drive stock markets. Since humans are part of nature, it follows that stock price movements too follow laws of nature.

The most common method in which the Fibonacci numbers are used in trading stocks is through Fibonacci retracement. In the Fibonacci number series, if we divide a number by another number, two places away, we get the ratio 0.382 and by dividing by the number that is three places away, we derive the ratio 0.236. The farther we move up the series, the closer the relationship gets to these ratios.

The Fibonacci retracement levels are based on these ratios; 0.236, 0.382 and 0.618.   0.55 is added in between, perhaps because 55 is a Fibonacci number and the half-way mark is always a significant support or resistance.

Once a security completes one leg of a move upward, the retracement supports for the correction that follows is calculated by deducting the product of the magnitude of the up-move and the various Fibonacci ratios and deducting these numbers from the most recent peak.

In a down-move the product of the ratios and the distance travelled is added to the most recent trough to arrive at the levels where the security is likely to face resistance.

These retracement levels are equally effective along all time-frames: intra-day, daily, weekly, monthly or quarterly. The frequency with which stocks take support or reverse lower from the Fibonacci retracement levels is truly awe-inspiring and can convert most traders to ardent followers.

Technical Analysis - MCX Copper, NG, Gold, Silver And Crude Oil.

The MCX gold futures contract is relatively more bullish in the short-term when compared with other commodities. Copper looks vulnerable while silver, crude oil and natural gas are testing their significant 200-day moving average supports.

Gold (Rs 30,332)

The MCX gold futures contract is bullish in the short-term. There is an inverted head and shoulder pattern on the daily chart with the right shoulder being formed now. Support is at Rs 29,700 and the contract can rise to Rs 31,500 in the short-term. A strong weekly close above Rs 31,500 will confirm the pattern and turn the medium-term outlook also bullish for the targets of Rs 33,200 and Rs 34,000. On the other hand, if the contract falls below the immediate support Rs 29,700, then the price can decline to test the 200-day moving average support near Rs 28,500. But the probability of the price declining below Rs 29,700 immediately is very low.

Silver (Rs 46,741)

The MCX silver contract remains weak. Although the 200-day moving average support is close, at Rs 46,701, failure in the last two weeks to breach the resistance at Rs 49,000 denotes weakness. Prices can decline to Rs 45,500 in near future. Breach of Rs 45,500 can take the contract further lower to Rs 44,500. On the other hand, a bounce from Rs 46,701 can result in the metal testing the Rs 49,000 resistance once again.

The medium-term outlook is also bearish. The price can decline to Rs 41,500 over this time period. Key resistance is at Rs 53,000.

Copper (Rs 441)

The MCX copper contract continued consolidating between Rs 440 and Rs 460 for the sixth consecutive week. Within this range, the contract has dropped sharply last week to close near the lower end of this range. The bias is bearish. It can decline below Rs 440 and fall to Rs 425. Failure to breach Rs 440 can keep the contract in this range for some more time.

The medium-term outlook is bearish. Strong resistance is at Rs 470 and the price can decline to Rs 400-390. Only a strong rise above Rs 470 will turn the outlook positive.

Crude oil (Rs 5,903)

Last week, the MCX crude oil contract failed to extend its corrective rally beyond its resistance at Rs 6,100. The contract looks vulnerable to decline below its Rs 5,850 support targeting Rs 5,650 in the short-term. However, if the support at Rs 5,850 holds, then there is a possibility of a rally once again to Rs 6,100 or even Rs 6,230.

The medium-term outlook remains bearish as long as the contract trades below the Rs 6,600. A decline to Rs 5,400 is possible over this time period.

Natural gas (Rs 229)

The 200-day moving average support near Rs 223 has held very well last week. The MCX natural gas contract has bounced back from this support to close higher by a per cent for the week. For the short-term, the contract can continue to consolidate sideways between Rs 210 and Rs 240. Within this range, the contract can rise to Rs 235-240 in the coming week.

However, the medium-term outlook is bullish. The contract has been moving in a bull channel for more than a year. The channel support is near Rs 200 and a decline to this support will provide a good buying opportunity. The contract can target Rs 270 over this time period.

Excess supply to keep zinc price ranged.

Zinc, the fourth most used metal, finds major use in the process of galvanising. Construction, transport and consumer goods are the major industries where zinc is used.

DEMAND, SUPPLY TO PICK UP

Global zinc production and consumption fell nearly 4 per cent and 2 per cent in 2012 respectively. However, the International Lead and Zinc Study Group (ILZSG) forecasts demand and supply to increase this year and next. The ILZSG projects demand to increase by 4.8 per cent and 5 per cent in 2013 and 2014 respectively. On the supply side, 1.7 per cent and 2 per cent is the increase it forecasts for 2013 and 2014 respectively.

Global zinc spot price has been moving in a broad range of $1,590 to $2,635 an ounce since 2010. This range has narrowed down to $1,750 to $2,200 an ounce in the last two years. Since 2008, the overall supply of zinc has always exceeded demand which has kept the price in a tight range. ILZSG forecasts this oversupply situation to continue in 2013 and 2014 as well. It expects supply to exceed demand by 1.20 lakh tonnes and 1.15 lakh tonnes in 2013 and 2014 respectively. As such, zinc price can continue to move sideways at least until 2014. However, Barclays, a global financial service provider, expects the zinc market to run into deficit in 2015 on weakening supplies from the mines.

TECHNICAL OUTLOOK

In this week’s dissector we see the outlook of the zinc futures contract traded on the Multi Commodity Exchange. The MCX futures contract closed at Rs 117.7, down 1.8 per cent for the week.

Long-term view: The long-term view is bullish for the MCX zinc contract. It has strong trend support near Rs 102 and below that the psychological support at Rs 100. These levels are likely to support prices in the long-term. Intermediate fall to these supports will be a good opportunity to enter long positions. A rise from the Rs 102-100 support zone can result in a rally to Rs 140 or even Rs 150. On the other hand, if the contract falls below Rs 100, then the decline can extend to Rs 96.

Medium-term view: The MCX zinc contract spiked to a high of Rs 136.9 and has come off sharply from there.

Significant resistance is at Rs 125.2.

The medium-term outlook would be bearish while the contract trades below this resistance.

The price can decline to Rs 110-108 over this time period.

The contract will need to rise strongly above Rs 125.2 to turn the outlook positive and take the price higher towards Rs 130.

Short-term view: The sharp fall from the August high of Rs 136.9 has taken support in Rs 116-115 region. However, the corrective rally from this support zone is finding resistance near Rs 120 now. A strong rise above this resistance is needed for the contract to rise higher towards Rs 125. Failure to breach the hurdle at Rs 120 can take the price lower to Rs 115 and can keep the price in a sideways range between Rs 115 and Rs 120 for some time.