Rubber may continue trade down on weak technical

INTERNATIONAL 

Crude is above the crucial resistance at $76.50 and likely to test $81 in the near term. Weak dollar has helped the natural rubber futures to trade higher on the opening note, but weak technical pulled down the prices towards 267.30. 

The ongoing technical correction may extend to few more trading sessions on Tokyo futures markets. It has minor support at 267, 266 and 263.50. Minor recovery can be expected in the later part of the day. 

DOMESTIC 

On the domestic front the technical correction which has started yesterday may continue. The poor monsoon showers and lower enquiries from end users can dampen the sentiments. The August contract has support at 179.25 and 178.10. 

Movements below 177.60 can cause further down trend and it can bring down the prices towards 176.14. Resistance for the August contract can be seen at 179.98 and 181.20. If it can open lower then one can expect side ways movement till noon. Value buying is expected at lower levels. 

Analysis of Tokyo rubber market as on July 13 

The market lost grounds three days in a row to finish at 260.1 yen with a loss of 5.4 yen as losses in the other commodities and plunging Shanghai rubber market spurred selling below 260 yen in the end. 

Selling pressure from the last trading continued during the night session on lower other commodity prices and the day session opened at unchanged level, after which it slowly declined on falling oil prices. 

When the Shanghai rubber market showed a drop after the opening, selling pressure gathered momentum and Tokyo market fell down to around 260 yen by loss cut selling. Although it hovered at around 261.0 yen on a quite tone for a while, falling Shanghai market subdued it just before the closing as low as 259.6 yen, the lowest price since December contract debuted. 

The Shanghai rubber market plummeted by technical selling as RSI is showing “Dead Cross” as well as losses in stock and copper market, finishing down 820 yuan at 20,985 yuan. 

Falling as low as 259.6 yen to break below 260.3 yen, the low price marked on 2nd of July, it can be said that the market is turning into lower side now. Gains in early July were reversed as a result but until it breaks below 250.9 yen, the lower side of the range, contrarian position is recommended.

(commodityonline.com)