Saudi Arabia plans to reduce March and April oil production to under 10 million barrels per day, below its official OPEC output target of 10.3 million barrels per day (bpd). Fundamentals are strong but a looming slowdown is what is keeping crude prices lid on the upside. Since the past 13 trading sessions, crude is stuck between Rs 4,000 - Rs 4,150. Any positional long can be exited below Rs 4,000 and new rally in crude will start above $70 in Brent or Rs 4,200 in MCX.
TARGET: Rs 143
STOP LOSS: Rs 133
Lead on the daily scale has bounced from an oversold zone with RSI_14 now trading at Rs 38. We have seen continuous fall in Lead from levels of Rs 154 to Rs 136.15. The low of Rs 136.15 has been tested twice in the last two trading sessions, so we are expecting the technical bounce back from current levels. Price action is also far from the important moving average so mean reversion is also expected. Thus, we recommend a long position from the current market price and expect levels till Rs 143 and maintain a stop loss of Rs 133 on a closing basis.
TARGET: Rs 445
STOP LOSS: 432
Copper has bounced from levels of Rs 434 and made ‘hammer’ candlestick pattern on the daily scale. Just like Lead, Copper also has corrected from highs of Rs 468 to Rs 434. RSI_14 is trading at 40 and the short-term moving average has started flattening out indicating selling pressure has subsided. We may see rally till Rs 445 from current levels. So, we recommend a long position with expected up move till Rs 445 and stop loss of Rs 432 on a closing basis.
Disclaimer: The analyst may have positions in any or all the commodities mentioned above.