Base metals – Which one to drop if you plan to invest?



Last week we saw base metals falling globally. Copper prices fell around 4% after the news broke about strike averted at Escondida mines in Chile was released.

Copper and other base metals bottomed out on continued news on trade war. We didn’t see much hope till Friday.

On Friday, we heard trade talks moving and there could be some solution. US and China plan to meet this week to discuss trade war as this has slowed down the growth for two major economies.


Obviously, all traders are keeping a close watch at bilateral trade talks which is aiming to resolve tariff war.

The news itself was good enough for base metals where we saw an uptrend movement around the globe including MCX. Today morning Copper and other base metals have been looking quite good and we have seen buyers jumping in the market.

Kunal Shah of Nirmal Bang Commodities says this is great time for an investor to initiate long position in almost every base metals. Currently all base metals are bottom out and this is a great time to buy since we might not see prices falling beyond this.

Looking at fundamentals, a weaker dollar boast demand for dollar priced commodities making them cheaper for buyer with other currencies. Also, with trade war discussion due this week just before the tariffs take effect on Chinese good is a positive sign.


With Rupee gaining momentum in the market, it is evident that we are growing. For dollar index to be strong, the GDP of US should be more than 5% which is not possible due to current trade war tensions.

Looking at base metals individually, I would suggest to initiate long positions in every base metals and stay away from Zinc.

If you are holding a buy position in Zinc, I would recommend to square-off your position as soon as you jump into green side of the trade to avert risk

Copper

Copper is currently looking very nice and would be best pick among all majorly due to fall in the prices we saw. In upcoming session, I foresee Copper touching 420-425. I would definitely suggest a buy position for Intraday and short-term traders. Buy Copper at 410- 411 for target of 415-416 and SL of 405.



Aluminium

I am quite bullish on Aluminium for this week. In the evening session, we might see prices moving to 146.
Initiate a buy at 143 for target of 146 and SL of 139. For positional traders, I would suggest holding your positions till 149 in upcoming sessions.

Zinc

Currently Zinc is bottomed out and we might not see much movement in Zinc. With some strength in Rupee we might see Zinc rally a bit to 169 but overall fundamentals in Zinc are not bullish. Zinc prices struggled against more than 15,000 tonnes of material freshly cancelled. Read more here
I would advise keeping Zinc off the radar at this point and wait for a week before you start fresh trade.

Base metals – Which one to drop if you plan to invest? Base metals – Which one to drop if you plan to invest? Reviewed by Olayinka Greatmind on August 19, 2018 Rating: 5

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