NMCE Rubber falls on strong selling

NMCE rubber futures extended the bearish trend on strong selling interest on Tuesday. On opening itself prices traded down on heavy selling pressure. TOCOM rubber futures also traded down on active selling all the previous gains.
Domestic spot market also witnessed a steady trend. Thus, on cues from domestic and international market NMCE rubber futures ended on negative note.
The rubbers futures are projected to extend the bearish trend today on negative cues from TOCOM futures. TOCOM rubber July futures are trading lower at ¥ 512.30 per Kg. on active selling interest.
However, prices might show small recover on short covering during the day. However, increasing Middle East concern might weigh on prices. Thus on cues from above stated factors NMCE rubber futures are projected to trade range bound to lower 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
People’s Bank of China has increased the interest rate by 50 basis which is pressurizing the rubber prices as China is the largest consumer of natural rubber
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
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 and open interest are falling while volumes are rising. Market is running out of traders willing to open or hold an open short. Traders are liquidating both loosing buy positions & closing winning short positions. A higher probability the market is set to retrace in price lower at some point forward.
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.

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