Bharath Kumar of Global Financial Market said crude has support at USD 36 per barrel, “while on the higher side, unless it closes above USD 42 per barrel decisively, we don’t think a major [upside] trend is establishing.”
On the MCX, Kumar said, crude has support at Rs 1,750 per barrel. “On the higher side, Rs 2,015 per barrel is a resistance for the markets. So, somewhere at around Rs 2,015-2,025, one should look for exiting long positions,” he added.
Here is a verbatim transcript of Bharath Kumar’s exclusive interview on CNBC-TV18. Also watch the accompanying video.
Q: What is the range that you are working with for crude now?
A: In the case of crude, USD 36 per barrel is a fantastic support. On the higher side, unless it closes above USD 42 per barrel decisively, we don’t think a major [upside] trend is establishing. The only major concern in case of crude is the rollover cost to an extent of USD 5-6 per barrel. Unless that converges, I think the choppiness will remain in the market.
Q: What kind of level or direction are you working with?
A: On the higher side, USD 42.50-43 per barrel is the level that we are watching. Unless it closes above that, we don’t think a major rally may be established.
But on the lower side, on MCX Rs 1,750 per barrel is a very good support. As the market reaches around Rs 1,800 per barrel on the Sensex, one can go for initiating long positions. On the higher side, Rs 2,015 per barrel is a resistance for the markets. So, somewhere at around Rs 2,015-2,025, one should look for exiting long positions.
Unless it closes above Rs 2,050 decisively, we don’t think a major rally is going to be established.
Q: What is your range for gold going forward from here?
A: On the lower side, USD 808 per ounce is a very important and crucial support for the market. Till it trades above USD 800-808 per ounce, I think the major trend is still intact.
But the short-term trend is a little bit on the weaker side because the market was unable to hold USD 880 per ounce. So, I think the market may correct to an extent of around USD 808 per ounce. Till the market trades above USD 790 per ounce, which happens to be a major trend reversal point, the market may go sideways and then afterwards we may see the prices inching higher. So, USD 790 per barrel is a watch-out level on the lower side.
Q: What is your view on base metals?
A: Copper is typically rangebound since the last couple of trading sessions. On the MCX, Rs 172 per kilogramme on the higher side is decent resistance. On the lower side, we are seeing a little bit of base being formed at Rs 155 per kilogramme. So, the market is chiefly trading between Rs 172-155 per kilogramme.
Unless the market gives way on either side, I don’t think any major correction on the lower side can be seen. In the same way, unless it closes above Rs 172 per kilogramme on the higher side, the market may not pull on the higher side. If it closes above that, I think it may test even Rs 191. But chiefly the market may remain rangebound for a couple of trading sessions.
