Metal Stocks will Blast from here.
But why ?
Before I answer that Question , We need to know what actually happened in commodity market yesterday.
COPPER + 8%
SILVER +7.6%
ZINC +6.76%
NICKEL +4.34%
ALUMINIUM +3.84%
GOLD +3.36%
These moves are not regular moves but rare fat tail
distribution that exhibits a large skewness towards upside relative to that of either a normal distribution or any other normal day.
This happened mainly because
The $DXY Dollar Index is suffered its biggest single-day drop (-1.94%) in a long time.
Metal stocks and dollar index have negative correlation.
This is the biggest drop in DOLLAR INDEX since December , 2015!
But why did the dollar correct so much ?
U.S. DOLLAR sinked more than 1% after jobs data showed firm labor market but slowing wage growth.
Nonfarm payrolls increase 261,000 in October
The world's largest economy added 261,000 jobs in the month of October, down from an upwardly revised level of 315,000 in September.
Unemployment rate rises to 3.7% from 3.5%
Non-farm payrolls report showed a rise in d unemployment rate to 3.7% last month from 3.5% in September, suggesting some loosening in labor market conditions that could give d Fed cover to shift towards smaller rate increases next month.
Smaller rate increase means less hawkish fed.
Less hawkish fed means weaker dollar.
The $DXY Dollar Index has traded 362 consecutive days above its 100-day simple moving average.This is the longest duration for which dollar has traded above 100 SMA. Chances of good mean reversion are present here.
If you look on the derivative's front then mostly all the counters saw increase in the open interest.
Except #JswSteel and #Hindcopper ,all are long buildup.
Open Interest in #Tatasteel increased by 6.8%
#NMDC +2.49%
#HINDALCO + 2.4%
What do we see on the charts?
Nifty Metal Index - Bullish Patterns
TATA STEEL - Bullish Patterns
SAIL- Bullish Patterns
HINDALCO - Bullish Patterns
JSW STEEL - Bullish Patterns
That's pretty much it.
Any new trend develops in the market and you don't track the technicals so closely ,don't worry
I have got you covered.
Follow @ArrushAdityadev &
Like and Retweet the first tweet if you learned something new today.
Good day guys!
Happy weekend!
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