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Tuesday, October 20, 2009
Crude touches $80 mark
Prices rise on strong China economy's figure
Crude prices ended substantially higher at Nymex on Monday, 19 October, 2009 and ended near the $80 mark for the first time in a year. Lower dollar and encouraging figures about China's economy pulled up oil prices today.
On Monday, crude-oil futures for light sweet crude for November delivery closed at $79.91/barrel (higher by $1.08 or 1.4%). Last week, crude ended higher by 9.4, the biggest weekly gain in two months%. In the past two weeks, crude has climbed up by almost 14%.
For the month of September, 2009, crude ended higher by a marginal 0.9%. For the third quarter, crude ended higher by just 1%. Crude prices had rallied 40% and 11.3% in the second and first quarter of 2009 respectively.
Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 55% since then. Year to date, in 2009, crude prices are higher by 58%.
In a latest report, it was reported yesterday that China, the world's second biggest oil consumer, saw economic growth at an estimated rate of 9% in the third quarter. That's up sharply from 7.9% growth in the second quarter and 7.1% over the first half of the year.
In the currency market on Monday, the dollar came under further pressure after the Federal Reserve Bank of New York clarified it has been testing reverse-repurchase agreements for technical reasons, and that the tests shouldn't be seen as hints of a tighter monetary policy, which might ordinarily be bullish for the U.S. currency. The dollar index, which measures the strength of the dollar against a basket of six other currencies, fell by 0.3%.
In the latest monthly report, the Organization of the Petroleum Exporting Countries, last week, raised its forecast for world oil demand by 200,000 barrels a day for both this year and 2010. After the revision, world oil demand in 2009 is expected to average 84.2 million barrels a day, which represents a decline of 1.4 million barrels from 2008 levels. In 2010, global oil demand is expected to average 84.9 million barrels a day, marking a growth of 700,000 barrels a day from 2009 levels.
Among other energy related products, November reformulated gasoline gained 0.4% to $1.9872 a gallon and November heating oil added 1.1% to $2.0522 a gallon.
Also on Monday, November natural-gas futures rose 1.1% to $4.835 per million British thermal units.
Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.
Precious metals shine again
Prices rise as dollar slips
Precious metal prices rose higher on Monday, 19 October, 2009 due to the dropping dollar. Prices rose as traders anticipated that interest rates will stay at minimum levels in the next few months in US.
Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.
On Monday, gold for December delivery ended at $1,058.1, higher by $6.6 (0.6%) an ounce on the New York Mercantile Exchange. In the last week gold had registered record highs quite a few times. It reached an all time high of $1071 earlier this week. Last week, gold ended higher by 0.3%. Year to date, gold prices are higher by 19%.
Gold ended September, 2009 higher by 5.9%. For the third quarter it ended higher by 8.7%. Before this, for the second quarter, gold ended higher by 0.5%. The metal had gained 4.3% in the first quarter of this year.
On Monday, December Comex silver futures ended higher by 21 cents (1.2%) at $17.63 an ounce.
Silver ended 11.8% higher for September, 2009. Year to date, silver has climbed 59% this year. For 2008, silver had lost 24%.
In the currency market on Monday, the dollar came under further pressure after the Federal Reserve Bank of New York clarified it has been testing reverse-repurchase agreements for technical reasons, and that the tests shouldn't be seen as hints of a tighter monetary policy, which might ordinarily be bullish for the U.S. currency. The dollar index, which measures the strength of the dollar against a basket of six other currencies, fell by 0.3%.
In the crude market today, crude oil surpassed $79 and created a record high price for this year.
In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.
Rei Agro
We recommend a buy in Rei Agro from a short-term perspective. It is apparent from the charts of the stock that from June high of Rs 103 it was on a medium-term downtrend till its late August low of Rs 45. Subsequently, the stock began to consolidate sideways. It breached the medium-term down trend-line in early September. The stock took support around Rs 45 for the second time last week. It has key medium-term support around Rs 45. On October 16, the stock crossed over its 21-day moving average by jumping almost 6 per cent with good volume. The daily relative strength index (RSI) is heading towards the bullish zone in the neutral region. Besides, the daily, moving average convergence and divergence (MACD) indicator has signalled a buy and is inching towards the positive territory. We are bullish on the stock from a short-term perspective. We expect the stock to move up further until it hits our price target of Rs 55 in the approaching trading sessions. Traders with a short-term perspective can buy the stock while maintaining a stop-loss at Rs 47.5.
via BL
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