Daily Report 200315 2015-03-20

Domestic AU1506 slightly reversed in the night session, short-term tendency tested the resistance at 237.5 yuan again. The speech of the Fed’s President Yellen pressured U.S. dollar index. However, the index rallied instantly after the plunge due to short-covering. Whereas for gold, it is likely to appear technical rebound, bearish view arose. On the funds hand, Gold ETF positions remained the same after Thursday’s 1.79 tons increase, showing the influence of the Fed’s statement. Funds’ pessimism might release, pay attention to whether the buying is persistent. Synthetically, since international gold prices are close to $1,130 lows, the market is likely to act periodical rebound.
Operation strategy: current tendency is still bearish, but bounce correction may happen in the short term. Defense at 10-day moving average for short positions built in at 254.5 yuan. Can try to take few long positions while rally appears intraday, stop profit at 240.5 yuan, and stop loss at 236.5 yuan.
Domestic AG1506 fluctuated and went high during the night session, strong resistance is at 20-day moving average of 3,530 yuan in the short term.
Operation strategy: current tendency is bearish, but bounce correction may happen in the short term. Defense at 20-day moving average for short positions built in at 3,800 yuan. Can try to take few long positions while rally appears intraday, stop loss at 3,480 yuan, and stop profit at 3,560 yuan and 3,600 yuan.
Stock Index
Stock index narrowly fluctuated yesterday, transportation and electronics sectors grew significantly, and banking groups also contributed a lot. Current factors that bolstering the market growth are simplified administration, empowerment, innovation and entrepreneurship, which equals to release productivity, and initiate new growth and business points; monetary policy is expected to be loose in order to lower costs of enterprises. Taken together new unfrozen money returns to the sector, pension funds enter the market and the People’s Bank of China (PBC) carries on its medium-term lending facility (MLF), it is more likely for the government to take easing.
Operation strategy: current tendency is bullish. On the other hand, stock index is growing rapidly. That is to say, profit-taking has accumulated for certain extend. Do not rush to chase, buy at lows, and hold previous long positions.
U.S. soybean, affected by U.S. dollar bouncing and profit-taking, rushed high and then fell overnight. The weekly U.S. soybean net sales was 342,000 tons, polled by the weekly export report, matched the expectation. Short-term U.S. soybean markets are waiting for the report coming at the month-end, that is to say, the report is an important guideline of short-term tendency. U.S. soybean shocking interval shifted lower, affected by volatile U.S. dollar recently, and the supply and demand is stable. Technically, the weak volatile interval has not been broken up.
On the domestic hand, soybean rebounded affected by overseas market. Soymeal physicals edged up 10-30 yuan/ton, and the main quoted prices was 2,980-3,040yuan/ton. Fodder farms and merchants were prudent on taking goods, purchasing willingness were low. Current soymeal actuals inventory is tighten, and forward prices are high. Both of the two meals is weak shock, also strong grease has restricted them in a certain extent. Domestic-made soybean stop was stable, quoted prices have ended up the continuous downtrend. However, the sales progress of production area is slow, depreciation risks are lurking later due to concentrated selling. Therefore, Soybean No.1 is projected to remain volatile and weak affected by warrant cost reduce.
Operation strategy: mainly take short-term positions just wait and see.
PP futures opened high and went higher associated with fluctuations yesterday, opened at 8,350 yuan and closed at 8,428 yuan; the trading volume cut 40,140 lots to 850,000 lots, and positions rose 43,312 lots to 264,000 lots.
On the upstream hand, FOB Korea Propylene fell $30, and averaged at $970.5/ton. On the devices hand, current operation rate is the same as before. On the physicals hand, domestic PP market prices were stable and edged up yesterday. PetroChina raised ex-factory prices in some regions, gave a stronger support for the cost. Overnight crude oil surged, PP futures moved at highs, sparked the market. Under the consideration of that, merchants gained a better mood and raised the price a bit, observe the market’s reactions. Downstream enterprises were prudent and took a wait-and-see attitude. There were more inquiries, trading volume was better than former.
Main wires’ quoted prices today in north, east and south markets are 8,250-8,400 yuan/ton, 8,350-8,500 yuan/ton and 8,350-8,500 yuan/ton.
Operation strategy: the fundamentals is mixed, view the market as a whole, current prices are at previous volatile interval, shocked narrowly seeking the direction and it is likely to keep fluctuating. We suggest investors to wait and see, pay attention to the change of months.
                                                                                         Dong LV (Investment Certificate NO. TZ008452)