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

Gold (Rs 30,236)

The MCX gold futures contract has been stuck in a narrow range between Rs 29,600 and Rs 30,500 all through November. Traders have to wait for a breakout of this range to get clear idea on the short-term trend and take positions accordingly. The target on a breach above Rs 30,500 will be Rs 31,500 while a decline below Rs 29,600 can target Rs 28,560. The medium-term outlook will be bearish as long as the contract trades below Rs 31,500. Decline below the significant 200-day moving average support, currently at Rs 28,562, will push the contract lower to Rs 25,400.

Silver (Rs 44,274)

The MCX silver contract has been losing momentum in its current downtrend. Last week’s fall was accompanied by low volumes which reflect a high possibility for a corrective rally. But since the trend is down, traders can go short now and go shorting it further on rallies to Rs 46,000-46,500 with a stop-loss at Rs 47,450. The target on the downside is Rs 41,400. Key short-term resistances are at Rs 46,270 and Rs 46,585. For the medium-term, Rs 40,000 will be a critical support level. Whether this support holds or gets broken will set the trend for the medium-term.

Copper (Rs 444.4)

The MCX copper has been range-bound moving between Rs 440-447 in the last week. Traders can stay back until clear signals emerge. The trend, however, is down and the contract has significant resistance at Rs 455. Fresh shortposition can be initiated if a rise from current level fails to breach Rs 455. Stop-loss can be kept at Rs 465. However, if the contract declines below Rs 440 immediately, go short with a stop-loss at Rs 447. The target for both cases mentioned above will be Rs 430. The medium-term trend in the contract is also down capable of falling to Rs 410 as long as it trades below Rs 460.

Crude oil (Rs 5,839)

The MCX crude oil contract has been consolidating sideways for the last five weeks between Rs 5,750 and Rs 6,100 within the overall downtrend. Traders have to wait for a breakout of this range to take a position. However, the short-term trend is down. Short positions can be initiated on a decline below Rs 5,750 with a stop-loss at Rs 6,150. The immediate near-term target will be Rs 5,650 and the short-term target will be Rs 5,400. On the other hand, if an immediate decline below Rs 5,750 gets averted and the contract breaches Rs 6,100, then a corrective rally to test the resistances at Rs 6,250 and Rs 6,400 is possible. In that case, traders can wait to enter short position at higher levels near Rs 6,400.

Natural gas (Rs 246.7)

The MCX natural gas has given a bullish breakout of its Rs 210-240 range and has risen sharply by 4.6 per cent last week. The outlook is bullish. Traders can initiate long positions at current levels and accumulate more long position on declines to Rs 240-235. Stop-loss can be kept at Rs 225 for a target of Rs 270. The contract has been moving in a bull channel. Last week’s breakout above Rs 240 has opened the doors for a fresh rally to the upper end of this channel. The channel resistance at Rs 270 will now be a key medium-term resistance for the contract in the coming weeks. There is a possibility for the price to turn down from this resistance.

Know your Margins for NSE Futures and Options (NFO), MCX or CDS, (Tech Tools)

Do you trade in future and options? As a Futures & Options (F&O) trader, you may want to know the margins you require ahead of making a trade. However, margins vary depending on factors such as the underlying asset, volatility, market lot size and expiry. This could make calculating margins a tricky affair.

Zerodha (http://zerodha.com/margin-calculator/SPAN) has a calculator to compute the margin requirements for options, futures and more complex F&O strategies in equity, currency and commodities.

The tool requires you to select the exchange — NSE Futures and Options (NFO), MCX or CDS — for your trade. It then displays the list of products available in the exchange. The tool also indicates the lot size so that the quantity you select can be adjusted accordingly.

You can enter multiple trades and evaluate margin benefits from calendar spreads or option strategies, such as straddles and strangles. When you write options, the tool calculates the premium received based on the previous day’s closing price. The total margin is computed after including these components.

The tool is available online for free, sans registration.

However, we feel the tool should offer current prices, which will help guide the user with the strike price for options. When writing options, if the strike price entered is not valid, the tool does not throw up the margin needed, nor does it suggest a list of strike prices. Also, we noticed issues, such as when a trade was deleted, total margin was not updated accordingly.

How long do cycles last ?

Plenty of research has been done on the cycles in the stock market in the US to gauge the time taken by each of these cycles, which can be used in investment decisions. Such studies are easier in the US where stock market data is available for over 100 years. But the oldest stock market index in India, Sensex, has data available only from 1979. This limits the utility of cycle analysis in India.

However, we analysed the Sensex monthly data since its inception to gauge the time taken by bull, bear and consolidation phases by our market. Here’s what we found.

Secular trends in stock markets are the long-term trends extending beyond 10 years. The Sensex has displayed a rising secular trend from 1979. Each correction within this trend has been followed by a higher peak, establishing a positive long-term trend. Within this secular trend, there are cyclical bull markets, bear markets and consolidation phases that have lasted anywhere between a few months to a few years.

CYCLICAL BULL MARKETS

We narrowed the definition of a cyclical bull market to those market phases that have resulted in the Sensex gaining almost 100 per cent without any significant correction. We have seen nine such phases since 1979. The gains in these phases have ranged from 96 per cent to 622 per cent and the time taken has varied from 8 to 56 months. It was, of course, the bull market between 2003 and 2008 that gave the largest gains and lasted the longest. There were corrections within this phase that were very short in magnitude or time taken to qualify as bear phases. If the 2003-08 bull market is excluded, these rallies have averaged a return of 160 per cent in 15 months.

CYCLICAL BEAR MARKETS

We have defined a cyclical bear market as one where the Sensex lost more than 40 per cent. There have been five instances since 1979 when the Sensex has fallen in this pattern. We have classified the correction between 1994 and 1998 as sideways correction since it lasted for an inordinately long period with a range-bound movement. The average decline in these falls has been 51 per cent with the maximum decline at 62 per cent in 2008. The fact that we have not had a decline greater than 62 per cent helps to underline the fact that our equity market is in a secular bull phase.

The time taken by these bear phases has at most times been equal to the bull phase, at about 14 months.

SIDEWAYS MOVES

Sideways moves can appear in both a secular bull and a bear market. When the reversal results in limited price correction, but lasts for an extended period, it results in a sideways moving market.

These kinds of moves are also common both when the market is building a base from which to launch the next upmove; and when it hovers for long near a peak before giving way. These are the most exasperating periods when prices fluctuate in both directions with no headway made either up or down. Investors often resort to sector rotation during these periods. There were three such phases prior to the 1990s, resulting in index movement of between +4 per cent and -15 per cent.

The average time taken by each of these phases was 21 months. One extended sideways correction that many old-timers in the market would remember is the one between September 1994 and November 1998.

This was the longest sideways phase lasting a protracted 50 months. But then the market needed this time to adjust to the wild excesses of the Harshad Mehta-led bull market in 1994 and the IPO frenzy in early 1994.

SEASONAL, ELECTION CYCLE

Our market too has an election cycle similar to the Presidential cycle in the US. According to this cycle, stocks tend to rally during the first two years of rule when a stable government is formed at the centre. Coalition governments result in sub-par stock returns in the election year. There are also some months which are better for stock investors. Since 1979, Sensex has recorded the maximum positive closes in December. October and March are the worst months for stocks according to this metric.

Iran deal knocks oil lower, bolsters risk appetite. Iran Nuclear Deal Done.

* Brent crude sinks over $2 a barrel on groundbreaking Iran deal

* Iran deal seen positive for risk appetite, global growth

* Yen remains under pressure, euro makes four-year highs

Oil prices fell sharply on Monday after Iran and six world powers sealed a deal curbing its nuclear programme, a fillip for global economic growth and risk appetites that should benefit share markets.

The agreement, reached late Sunday, gives Iran some relief from crippling sanctions. While it will not be allowed to increase its oil sales for six months, any easing of Middle East tensions tends to lead to lower crude prices.

Brent crude oil shed $2.29 to $108.69 a barrel, its biggest daily drop in a month. U.S. oil dived $1.09 to $93.75 a barrel.

Iran Nuclear Deal Done (-20% Uranium Production For $6-7bn Lifted Sanctions)

UPDATE: Details of the deal are emerging including $4.2bn in FX

Despite earlier denials from Iran's Deputy FinMin, EU, Iran, and US officials have confirmed:

• *IRAN NUCLEAR ACCORD WITH WORLD POWERS ENDS 10-YEAR DEADLOCK
• *IRAN WILL HALT 20% ENRICHMENT FOR 6 MONTHS, FARS REPORTS
• *IRAN AGREEMENT DOESN'T FORMALLY RECOGNIZE RIGHT TO ENRICH
• *IRAN AGREEMENT WILL STILL ALLOW IRAN TO ENRICH URANIUM
• *IRAN INTERIM AGREEMENT FREEZES ADDITIONAL SANCTIONS
• *IRAN DEAL LIFTS TRANSPORT AND INSURANCE SANCTIONS ON OIL

(With this Deal, Brent crude oil may touch $100 a barrel, U.S. crude oil $86 a barrel.)

Jim Rogers Blasts "Abolish The Fed" Before It Self-Destructs.

"The world has consumed more than it produced for more than a decade," Jim Rogers explains to BoomBust's Erin Ade; but his comments to the leather mini-skirted anchor with regard the actions of the world's central banks bear the most attention. "The world is floating on an artificial ocean of printed money," he blasts, adding that while it's going on "everyone's happy," but at the first sign of it slowing, he warns, "we will all dry up."

Rogers sees gold as a crucial holding in this respect but believes there will be a better price to buy more, as he reflects on the suppressive actions of the Indian government.

This excellent far-reaching interview covers everything from gold standards to China's 3rd Plenum "I much prefer the Chinese system of open markets than the US with the government dictating everything" and from Bitcoin to a barbaric destruction of the Fed and all it stands for, "the Fed will self-destruct, before the polticians realize what is going on."

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4:30 Agriculture/Farmland - bullish sugar and farmland - "The world has consumed more than it produced for more than a decade," and inventories are near record lows

6:25 Central Banks - "for the first time in history, all central banks are printing money... The world is floating on an artificial ocean of printed money,"

7:15 Gold - "I am not selling any of my gold, but believe there will better prices to buy... the Indian government is actually trying to make its people sell their gold."

8:45 Gold Standard - "it might work for a while but eventually the politicians will cheat that too"... "people wil be desperate in the next decade to try anything - maybe it will be bitcoins"

9:40 Bitcoin - there are many more important things in the world than worrying about bitcoins

10:15 China's Plenum - "the Chinese are becoming more and more capitalist"... they are becoming more and more market focused... as opposed to the US where when there is a problem "the government decides how to fix it... look at Obamacare" - "the government says "we will figure out the solution"... "I much prefer the Chinese system of open markets than the US with the government dictating everything"

15:20 The Fed - "The way the world has worked for a few thousand years is - that when people get into trouble, they fail; competent people come along, reorganize the assets and start over..." In America, he chides, "they decided to let incompetent people take over the assets from competent people and compete with the competent people." - The Japanese tried this in the 90s and it failed for 2 lost decades.

"In America, they are kicking the can down the road, and when the can finally goes over the side, we are all going to go with it."

"We've had 50-60 years of excess in America, you've got to pay the price some day whether you like it or not... the longer they delay the day of reckoning the worse it will be."

17:40 Abolish The Fed - "the world has gotten along very well for most of history without central banks."

"we would be better of with no central bank, than this central bank"

19:00 Stocks - "we are certainly gonna have a crash some day" - "as long as they keep printing money, and no restraints on congressional spending, this bubble could go on forever"

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.