With elections over now when you will be reading this newspaper you will be experiencing the game of seats tally and parties hopping from one party to another and the mad scramble to form the government. What is really interesting to see that all the parties are so confident of forming the government as if each of the party is the last straw that can save the ship to wreck? The whole situation will be like a box of crabs wherein if anyone tries to go out of the box it will be pulled down by another. But what will be the last decision will obviously be seen when the new government is formed. Whoever forms this government pray that it stays and runs for another 5 years.
As far as the trading goes right now the hot market is the betting on the politicians of who will win or loose, who will become the prime minister or who will quit politics. Bets have been running high and who says that speculation is only limited to share and commodity markets only.
Today when I picked up the pen to write the article I faced the dilemma of which commodity to pick up as there is no major commodity that can be written on as the fundamentals that I put in will not be valid for a long time to come. A rain here in there and all the fundamentals hold no ground.
Right now the prices have been in a very narrow range as no new tops or bottoms are being breached. With prices in such narrow ranges positional calls can be decided only after the first rains hit the country. This week I have decided to put in the ranges of most of the commodities and will let you decide which way you want to trade. With the highs and lows that I will put in if either one of the figures are breached and if the prices close above or below that figure for minimum of two days then the trend for the next 3 months will be in sight.
Ncdex :
Chana (jun-09) high 2536 low 2258
Castor (jun-09) high 525 low 486.20
Chilli (jun-09) high 5015 low 4750
Guargum (jun-09) high 4015 low 3641
Guarseed (jun-09) high 1935 low 1745
Jeera (jun-09) high 12615 low 11480
Maize (jun-09) high 975 low 838
Pepper (jun-09) high 13925 low 12565
Soy oil (jun-09) high 530.50 low 478.90
Rapeseed (jun-09) high 554.50 low 508
Sugar (jun-09) high 2651 low 2272
Soybeans (jun-09) high 2882 low 2570
Turmeric (jun-09) high 5796 low 5113
Mcx:
Aluminium (may-09) high 82.95 low 64.50
Cardamom (jun-09) high 767 low 685
Copper (jun-09) high 250.80 low 210.15
Crude (jun-09) high 3025 low 2496
Gold (jun-09) high 16053 low 13906
Lead (jun-09) high 83 low 61.50
Nickel (jun-09) high 676 low 542.50
Silver (jul-09) high 24325 low 19951
Zinc (jun-09) high 83 low 62.65
For those following the equity markets
Nifty will range between the high of 3829 and low of 3168 which depends on the new government coming in power and their stability and the rains?
All the fundamentals will now change as the moves that had to come till now in the prices are over and the new trends will be set in another 3 months time. One thing that has to be observed is that all the agri-commodities have their open interest set in the month of June which itself is evident of the fact that all the commodities are waiting for their moves after the first round of the rains set in. Commodities apart, even the equity markets have their eyes on the rain which will also decide how the sensex and nifty will move. God forbid if the rains are not good then even the new government that will be formed will face tough times with the inflation and also risking itself to a fall.
I have been looking at the satellite images since last one week and the way the cloud formations are coming in the rains are coming in at the right time with a maximum delay on 1 week from the normal time. After the first rains are set in I will be visiting the places to have an idea of how the crops are and what is the flow of crop sowing in the villages. This itself will be a process of minimum 2 months but that will give the concrete idea of the crop situation. Because no trader will take the risk of taking a position and risking it against the rains to take a big hit with stop losses it will be advisable to currently shift to very short term trading instead of positional trading. Intraday will be very volatile so please be careful with your stop losses. There is no harm in getting scared as it will save you lot of money.
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