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Commodities
in 2017:

Options in the basket

The year 2016 broadly saw a positive trend in
major commodities. On one hand, precious
metals failed to convert the positivity seen in
first half into a rally while on the other hand,
base metals and energy segment performed
above expectations. For agro commodities,
2016 can be described as a dull year amid
various policy impacts and restrictions. Let
us see, what the New Year has in store for
commodity market as SEBI hints to start
options trading anytime soon.

Bullion Energy Base metals Agro commodities

For 2016, we expected After hitting our forecasted 2016 will be remembered for Jeera performed perfectly
bullion segment to remain level of $26 for 2016, Crude unprecedented rally seen in in line with our forecast
bearish. However, the oil bounced back sharply in Zinc and Lead. Both metals for 2016. As expected, the
then technically over-sold last ten months to reclaim are likely to continue to aromatic spice shifted in
status of Gold and Silver its bullish stature. The shine amid an interesting impulsive bullish rally in
propelled good buying bounce back, in fact, turned tussle over price spread. second half of 2016. Jeera
support in the first half. into a full-fledged rally as The strategy should be to
It was in the second half, prices saw a more than 100 go long at current levels in may trade in Rs 22000-
after July, that the primary percent rise. The rally now both metals while traders
bearish trend showed its has strong legs on technical interested in spread strategy Rs 25000 price territory
true colors. Our last year’s chart and it would not be should buy Zinc and sell this year. Any correction
target range of $950-$900 in surprising if prices touch towards Rs 16000-Rs 15500
gold may be achieved this levels above $72 within first Lead at current difference can be used for positional
year. In Indian market, we three quarters. At MCX, a buying. In soy complex,
price range around Rs 3300 of Rs 32 for a target of Rs 45 Soybean and Mustard seed
may see prices tumbling qualifies as a good buying to Rs 50 in next few months. may extend their downside
point. Natural Gas followed Copper and Aluminium, by another 10% to 15% in the
towards Rs 24500-22000 in crude oil’s footsteps and though immersed in a low first quarter before regaining
range. Silver is having showed a twofold growth profile, are also expected the momentum in second
key support at $16 which in last ten months. The to better their performance half of the year. Soybean may
it briefly breached a few impulsive rally is likely to in 2017 but traders should
days ago but the real continue in the first half of wait for a healthy correction reclaim Rs 4000 level while
breakdown will take place 2017 while we may see a from here to take buying
when it closes below it on follow through correction positions. Nickel is also Mustard seed can touch Rs
monthly basis. In worst in the second half. Prices at likely to take a decisive 5500 mark post June. Guar
case, the breakdown may turn in 2017 after trading complex is likely come out
take prices towards next MCX may see upside till in a positive yet lackluster of the sluggish zone this year
important support of $11. manner. The distant cousin and take a decisive turn. We
Rs 330-360. Buy on small
In Indian market, prices of silver may see an upper may get to see a consistent
dips from here. range of Rs 900-1050 in 2017.
may see a downside range rally above Rs 3500 which

of Rs 30000-27000. may take prices towards Rs

5500-6000 range.

10 ARIHANT CAPITAL ¡ JANUARY 2017