Crude Oil is trading at highest since Dec 2014. Brent Crude has managed to break $71 in NYMEX. The Syria conflict overshadowed expanding US crude oil production and inventories. Market ignored the higher than expected US crude oil inventory which shows bulls are totally in control and disregarding any negative crude oil news. As long as the tension is not abated, we don’t see crude oil price retracing. Near term support for crude in MCX is at 4300 and 4180. The momentum indicator is showing some negative divergence so short term we may expect some cool off in prices although the trend remains positive in medium term. 4500 is the next resistance for Crude and traders are recommended to stay long as long as 4240 is not breached on closing basis.
Target: Rs 158
Stoploss: Rs 152.50
Symmetrical triangle pattern can be seen in daily chart in Lead. The prices have bounced after taking support at the uptrend-line. The emergence of hammer candle stick pattern near the support zone also indicates short term trend reversal. The range is getting narrower so we can expect range breakout in near term. We expect resistance near 158 which is where 200 day moving average is. We recommend taking long position in Lead with target of 158 and stop loss of 152.50
Target: Rs 142
Stoploss: Rs 149
Aluminum is classic case of running too fast in too little time. The gain of 16% in 3 trading session is something which Aluminum in its history has never done. Also we can see harami candlestick pattern at the top which generally suggest that buying has been exhausted and we can expect correction or sideways consolidation in near term. The oscillator RSI_14 is in overbought territory which again confirms that holding long is unattractive with risk reward ratio. So we recommend creating short position in Aluminum with target of 142 and stop loss of 149 closing basis.
Disclaimer: The analyst may have positions in any or all the stocks mentioned above.