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COMMODITIES WITH T GNANASEKAR
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18 March 2024
Monday
Crude oil futures end the week higher as the market digests more bullish outlooks by the International Energy Agency.
Crude oil futures end the week higher as the market digests more bullish outlooks by the International Energy Agency, the U.S. EIA, and OPEC, which trimmed their supply-growth projections for the year, largely on the extension of OPEC+ cuts. It was fueled by strong US demand and a more optimistic outlook for global oil consumption. Recent data from the International Energy Agency revealed a surprise decline in US crude inventories, dropping by 1.536 million barrels last week instead of the expected 1.338-million-barrel increase. The EIA also revised its 2024 global oil demand forecast upward to 1.3 million barrel per day, from the previous estimate of 1.2 million bpd, and adjusted its projection for this year to a slight deficit instead of a surplus. This week, oil prices were also supported by Ukrainian drone attacks on Russian refineries, causing a fire at Rosneft's largest refinery. Also, ongoing geopolitical tensions in the Middle East and the decision by OPEC+ to extend supply cuts further contributed to the strength in oil prices.
Product offering
Winning the market is creating the right combination of information, preparation and action. This information from T Gnanasekar equips subscribers to this service with information, analysis, updates and recommendations in the commodity market.
top Trading Opportunities
T Gnanasekar will identify trading opportunities with prospect of high returns in commodities. This service will also highlight profitable tradable situations in currencies. The trading calls and follow up calls will be rendered through SMS for timely action. Follow up SMS may be sent if and when there is any change in the advised content of earlier messages. (The SMS will mention entry price range, stop loss levels and the expected target zones)The SMS, calls and other communications will be based on the general market situations and trends and shall not contain any recommendation which is specific to particular client/subscriber or class of clients/subscribers.
SAMPLE SMS
- Buy MCX Gold Dec on dips at 26900, Stop loss 26800, Target 27100/27200
- Sell MCX Copper Nov At CMP 410 Stop Loss 412.50, Target 404
- Buy MCX Natural Gas Oct At CMP 236, Stop Loss 233, Target 242
- Sell MCX Zinc Oct on rallies At CMP 141.90, Stop Loss 142.90, Target 139.90
- MCX Crude Oct Sell Call Given Book Partial Profits At CMP 5310 And Trail Stop Loss To Cost
WEEKLY ROUNDUP REPORT
The weekly roundup report will provide detailed insights on the current and future trends in the commodities. It will outline the trading opportunities in the week ahead.
Newsletter Sections-content Snapshot
Market analysis: Roundup of the weeks activity in the global commodity markets. A detailed view on on Gold, Silver, Crude and any other metals that are in the news or are displaying interesting chart patterns to identify trading opportunities within them.
Week ahead: Lists out the important Economic Data and events that could impact the commodity and currency markets.
Hedging Corner: Provide hedging strategies selectively on commodities that display a possible turnaround in the both the agri and non-agri complex.
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Why Subscribe ?
GNANASEKAR THIAGARAJAN will help you navigate the complex world of commodities and profit from it.
- Veteran analyst’s wisdom: On this road to wealth creation, you will be guided by veteran commodity market analyst Mr. Gnanasekar, who has been tracking various commodities for two decades now. Besides having in-depth knowledge across commodities, Mr Gnansekar is unbiased in his strategies as he is not an intermediary and so does not depend on commissions from putting through trades.Further, No personal advantages in monetary or other terms are gained by Mr. Gnansekar while advising on commodities.
- Forewarned is forearmed: The key to ascertain potential opportunities at the right time is to be clued into the rapidly changing trends in the world of commodities, both at the local and global level. With Mr Gnanasekar’s expertise, that will not be a problem for you.
- Trade with ease: Commodities may appear intimidating, but that will no longer be the case once Mr Gnanasekar’s broken through the layers of jargon and simplified the various terms for you. All you have to do is just trade, but knowing the intricacies of the market will help put you at ease.
- Experience backed by science: The recommendations are backed by scientific analysis using a mix of fundamental and technical analysis and proprietary trading systems. Gnanasekar uses a unique combination of simple trend and counter trend techniques as well as the complex world of Gann and Elliot wave methods in addition to using trading systems created from proprietary models.
- A well-rounded product: Does not matter which category of investor class you belong to. Mr Gnanasekar’s offering has something for everyone, as his strategies span varied investment time horizons. It also caters to corporates and trading houses exposed to commodity and currency price risk.
ABout GNANASEKAR
Co-Founder and CEO, Commtrendz Research
Mr. Gnanasekar Thiagarajan is a veteran in the commodity markets. He has been tracking commodity markets and working with organizations exposed to commodity price risk much before the advent of MCX.
In his 20 years of experience he has dealt with major market movements across the agriculture and non-agriculture commodities and hence is well versed with devising suitable strategies to get the best out of them. He was a active trader at Scotiabank, one of the largest bullion bank in the world before he founded Commtrendz Research along with Mr. Yeshwant Rao, his mentor and co-founder, who was the Head, Trading Strategies for Reliance Petroleum business. Gnanasekar's views are much sought after and he has been featured as an expert market commentator on television, print and electronic media. He writes a weekly column on Gold, Palm oil and Cotton in The Hindu BusinessLine and a blog on commodities and currencies for the Economic Times. He is a regular speaker at various industry conferences in India and abroad.
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Going into next week, we see Bullion prices with a mild bearish bias, but could continue to consolidate, while crude prices are expected to stage a recovery and a possible profit-taking in the dollar
10.59 AM
In the latest sign that the world's largest economy remains on the path to recovery, data showed U.S. employers added the largest number of workers in nearly three years in November and wage gains picked up, fueling expectations the Federal Reserve is closer to raising interest rates. The surprise was in the energy markets, which typically reacts positively to any strong economic data. The strong U.S. employment data did little to lift the oil market's bearish mood. However, the strength of U.S. economy, as evidenced by the employment data, contrasts with that of the euro zone, where Germany's Bundesbank this week halved its 2015 growth forecasts for Europe's largest economy to 1 percent.
HEDGING CORNER
We will briefly explain the importance of hedging for corporations exposed to price risk as a consumer and producer. If the commodity is exchange traded and has good depth and liquidity, it is qualified for the purpose of hedging risk. We will endeavour to provide hedging strategies from this update selectively on commodities that display a possible turnaround in the both the agri and non-agri complex.
What Hedging Cannot Do?
• It cannot stabilize prices.
• It cannot raise market prices.
• It cannot offer above-market prices.
What Hedging Can Do?
• It can raise revenue, both in a given period and in
the long-term.
• It can stabilize revenue for the organization exposed to price risk.
• It can offer above-market revenues in the long run.
• It can provide predictability to revenue, which means….
• It can enhance producers’ credit-worthiness and ability to borrow.
For effective hedging, it is vital that a trader terminates (or "lifts") his hedged position in the commodity at the same time as he closes his position in the physical market.
In this week, we will look at crudeoil futures and how it can enhance value to corporation that produce crude. The fundamentals in the energy markets are bearish especially after the surprise in the OPEC meet that left output unchanged for possibly political reasons. With an almost forty percent drop in prices from the highs of $115 in June to $67 in December 2014, Brent crude futures is getting ready for an upward retracement. Such a retracement could extend to $87 levels in the coming weeks. However, the potential for downside from present levels still exist, we feel it could be limited and most of the negativity has been already priced in. A colder-than-expected winter may support oil, although prices are likely to slide after peak-demand season ends in the first quarter next year. For corporations that import crude to refine could actually increase physical purchases at present levels and start terminating some of the hedges that it could have initiated earlier only to re instate them at higher levels again.
Hedging Strategy for Crude oil producers:
In this case if the producer sells crude oil at the present lower levels in the physical markets, and if prices rise from here, the loss in the physical price is offset by the possible profits in the futures position, provided there is an upward retracement as per our expectations. If in case the view goes wrong, there is a stop loss which is like an insurance premium we pay for risk.
Buy Brent January contract at $68.00/bbl (MCX: 4,025) and some more near $65.50/bbl( MCX: 3925) with a stop loss at $58 ( MCX: 3700) and a potential target near $85-87/bbl ( MCX: 4900-5,100).
Gold & Silver:
Gold fell over 2 percent on Friday, Market participants said the flip back to positive territory came as bears covered their short positions. Hedge funds and money managers boosted their bullish position in U.S. gold contracts to the highest since August in the holiday-shortened week to Dec. 2, the Commodity Futures Trading Commission said on Friday. Gold fell more than 1 percent on Friday, after U.S. November non-farm payrolls data beat forecasts, fueling expectations that the Federal Reserve will raise interest rates sooner rather than later and lifting the dollar. Labor Department data showed the U.S. economy added 321,000 new jobs last month, the largest number in nearly three years, and wages increased.
Crude:
Oil prices closed sharply lower on Friday extended losses below US$70 a barrel yesterday and was set for a second weekly fall, with top oil exporter Saudi Arabia cutting prices, in another indication that it would maintain output in an oversupplied market. Saudi Arabia cut monthly prices for crude it sells to the United States and Asia, while Iraq is set to export more oil, preventing Brent from staging a recovery after a nearly 13 per cent plunge last week. Only a colder-than-expected winter may support oil, although prices are likely to slide after peak-demand season ends in the first quarter next year. But lower prices could also support global economic growth by boosting consumer purchasing power.
Copper:
Copper prices and other base metals fell on Friday, pressured by a buoyant dollar and concern about a possible early hike in U.S. interest rates following upbeat U.S. jobs data. A strong dollar makes commodities priced in the US dollars more expensive for consumers. COMEX COPPER speculators increase net short positions by 4,048 contracts to 5,919 in week to December 2 to reinforce bearish expectations.
Gold Feb.
Technical view:
Prices hit our mentioned resistance level of 1210-1225$ last week. Strong resistance will be seen in this area and prices will consolidate lower possibly in coming days. A break above 1225$ is required for a further up move higher. Supports will be seen near $1184 (MCX: 26,000).
Silver Mar.
Technical view:
Technically, Comex Silver recovered to expected levels of $16.70 (MCX: 36,700) in line with our expectations. Supports will be seen near at $15.75-85 (35,200) could be used as opportunities to buy again. A move above $16.70 (MCX: 36,800) would suggest a strong move on the higher side for targets of $17.50-17.75(MCX: 39400-900).
Crude Dec.
Technical view:
Crude continues to trade in an extremely oversold territory and a pullback rally looks in the offering. Initial supports could be seen near the recent bottom of $64-63.50(MCX 4050-3980) levels. Move above 70$ should open up the way for a recovery towards 75-77$ in the coming week.
Copper Feb.
Technical view:
Techincally, as cautioned in the previous update, though Comex copper pulled back higher towards 3.07 (MCX: 418), but lacks the follow-through to push higher. Resistances at $2.90(MCX: 395) could cap for a decline towards $2.73(MCX: 367).
Weekly Close:
Commodity
Contract
Close
Prev. Week Close
% Change
Gold
Feb.
26357
26172
0.71
Silver
Mar.
36699
35363
3.78
Copper
Feb.
403.4
390.75
3.24
Crude Oil
Dec.
4120
4210
-2.14
Pivot Table:
Commodity
R3
R2
R1
Pivot
S1
S2
S3
Gold
28587
27808
27083
26304
25579
24800
24075
SILVER
42433
40140
37069
36126
34405
32112
30391
COPPER
427
417
410
400
394
384
377
CRUDE
4634
4476
4219
4140
3962
3804
3626
Week ahead: Important Economic Data
Date
Country / Currency
Event
IST
Actual
Cons.
Previous
Effect
10DEC.
USD
Crude Oil Inventories
21:00
-3.7M
11DEC.
USD
Core Retail Sales m/m
19:00
0.1%
0.3%
USD
Retail Sales m/m
19:00
0.3%
0.3%
USD
Unemployment Claims
19:00
299K
297K
USD
Natural Gas Storage
21:00
-22B
12DEC.
USD
PPI m/m
19:00
-0.1%
0.2%
USD
Prelim UoM Consumer Sentiment
20:25
89.6
88.8