NMCE Rubber drops on profit booking

NMCE rubber futures traded slightly down on Saturday. Futures started the day on positive note on active buying spot market activity also supported the upside. However, later on prices reversed the trend on negative side on profit booking at higher levels. Though prices tried to recover during the closing hours but failed to recover all the losses and futures ended on lower note.
The rubbers futures are projected to trade slightly positive today on positive cues from TOCOM futures. TOCOM rubber July futures are trading higher at ¥ 528.20 per Kg. on active buying interest.
However, initially we can see a good correction in prices on profit booking on higher levels. Good domestic demand might support the trend on fresh buying during the day. Emerging demand from tyre industry is also supporting the prices at domestic spot market. Thus on cues from above stated factors NMCE rubber futures are projected to trade range bound to positive today.
Factors to Watch For
The stock of natural rubber in the country till January 30, 2011, is estimated at 3,27,115 tons, according to chairman of Rubber Board of India
Natural-rubber inventories monitored by the Shanghai Futures Exchange is reported around at 58,058 tons, which is down by 62 % from last year’s highest inventory levels of 151,832 tons
According to the Association of Natural Rubber Producing Countries, Natural-rubber consumption in China and India may rise 9 percent to 3.6 million tons this year and 5.2 percent to 991,000 tons respectively
Rubber futures at TOCOM has gained by 23% this year on rising supply shortage due to heavy rains and floods in Thailand and other Asian countries
According to Passenger Car Association, Passenger-car sales in China in January rose 15.3 percent from a year earlier to 1.4 million units on Feb. 14
DERIVATIVE ANALYSIS
Indian Futures (NMCE)
The NMCE February contract, prices, volumes and open interest all are falling. if the total open interest is falling off and prices are declining, the price decline is being caused by disgruntled long position holders being forced to liquidate their positions. Technicians view this scenario as a strong position technically because the downtrend will end as all the sellers have sold their positions, creating fresh buying opportunity at lower levels.
Japan Futures (TOCOM)
The TOCOM active June contract, prices are falling while volumes and open interest are rising. If prices are in a downtrend and open interest is on the rise, chartists know that new money is coming into the market, showing aggressive new short selling. This scenario will prove out a continuation of a downtrend and a bearish condition.
Shanghai Futures (SHFE)
The SHFE active June contract, prices are falling while volumes and open interest are rising. If prices are in a downtrend and open interest is on the rise, chartists know that new money is coming into the market, showing aggressive new short selling. This scenario will prove out a continuation of a downtrend and a bearish condition.

(Source: http://www.commodityonline.com/futures-trading/technical/NMCE-Rubber-drops-on-profit-booking-22065.html)