NMCE Rubber rises on extended buying

NMCE rubber futures extended the bullish trend on follow through buying on Thursday. Futures started the day on positive note on active buying spot market activity also supported the upside. TOCOM futures also traded higher on supply concern and settled at ¥ 524.10 per Kg. Thus, increasing demand amid supply shortage supported the prices and futures ended on higher note.
The rubbers futures are projected to extend the bullish trend today on positive cues from TOCOM futures. TOCOM rubber July futures made a new all time high of ¥ 533 per Kg. and now trading at ¥ 532.10 per Kg. on active buying interest. 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 higher 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 Rubber Research Institute of Thailand, The physical price of natural rubber in Thailand, the world’s largest exporter, extended gains to an all-time high of 196.30 baht ($6.41) per kilogram yesterday on expectations that demand for tires will continue to rise.
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 and volumes are increasing while open interest is falling. Market has a lot of traders initiating from both sides but larger traders may be liquidating into the higher prices.
The market may be vulnerable to large price swings as shorter time frame traders attempt to trade from both sides of the market but liquidating before end of- day. Often a signal of a market turns near-term or continued volatility.
Japan Futures (TOCOM)
The TOCOM active June contract, prices and open interest are rising while volumes are falling. Market is attracting late buyers & early shorts; market is vulnerable to a sharp correction but likely that that correction will be bought creating a buy point for uptrend.
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-rises-on-extended-buying-22042.html)