Daily TOCOM Rubber Price Outlook and Strategy

Decision enabling market analysis & price outlook

For Mar 11, 2013

Report Summary
TOCOM RSS3 Aug13 Futures JPY 298.20(+6.70) as on Mar 8, 2013 Critical factors Optimistic economic growth for China and US Fundamental Summary Likely start of active NR buying Lean production season ahead Depreciation of yen Increased NR exports from India Impact Marginal Bullish Marginal Bullish Marginal Bullish Marginal Bearish Marginal Bearish Weightage % 15% 25% 20% 15% 25% Indexed Score Score (1-5) 4 4 4 2 2 3.2

Below 2 Bearish; 2 to 2.5 Marginal Bearish; 2.6 to 3 Consolidation; 3 to 4 Marginal Bullish; above 5 Bullish

Technical Summary

Minor swing low has been affirmed at JPY 281 levels with anticipated positive bias in coming sessions. The previous up leg from Nov12 Feb13 (JPY 243-340) was an extended impulsive move, therefore, chances of double retracement of this move is likely. Hence prices may witness a sharp pullback towards JPY 310 and JPY 330 levels. On the higher side, JPY 310 levels would act as immediate resistance (around 18 period EMA) while the next resistance is pegged at JPY 330 levels. Concisely, prices are likely to extend the positive streak towards JPY 315 levels with support in place at JPY 287 in forthcoming sessions. Next five sessions Initial Level (IL) Subsequent Level (SL) 300 310 Next ten sessions IL SL 310 320

Price outlook summary

Price Ranges

IL=Initial level (Initial Expectation from the current closing) SL= Subsequent level (The subsequent forecast after reaching the initial level)

Strategy Review Trading Strategy

One may hold the same in line with below mentioned strategy. Filled on Mar 07
th

Position Long

Filled at JPY 289

Objective JPY 305

Stop Loss Below JPY 283

Performance Audit
TOCOM NR Futures Range honored % Net profit / Gross profit Ratio % Since 2003 67.92% 73.46% CY 2012 66.67% 74.80%

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Daily Tocom Rubber Price Outlook and Strategy

Fundamental Analysis TOCOM NR futures traded positive during the session under review due to depreciation of yen against dollar and positive impact bearing data set for US unemployment rate and rise in China Feb13 exports. Demand front, buyers are active in purchasing NR in the wake of decline in NR availability on approaching lean production season. At the same time, NR inventories further rose by 0.4% during the week indicates still inventories are higher across supply chain. However, lean production season will help in reducing the inventories and the same shall add support to the NR prices. Meanwhile, Indias NR exports increased for Feb13 by seven fold to 6650 tons compared to last year owing to higher demand from buyers as Indian NR prices were in discount compared to global market prices. On the other hand, yen against dollar appreciated towards 94.06 in the wake of BOJ to keep monetary policy stable and no fresh policy changes in short term. Meanwhile, BOJ revealed that Japan's economy is expected to level off more or less for the time being, and thereafter, it will return to a moderate recovery path. In overall, NR prices are likely to remain range bound with positive bias owing to weaker yen, positive economy growth expectations and likely revamp in NR purchases in short term before NR prices gain the heat of decline in production on seasonality. Collating the above factors, TOCOM NR futures prices are likely to trade range bound with positive bias for the coming 3-5 sessions. Technical Outlook: TOCOM RSS3 Aug13 futures Prices extended the bullish streak in the past session and settled sharply higher at JPY 292.20 higher by JPY 6.70 than the preceding session. The previous upleg from Nov12 Feb13 (JPY 243-340) was an extended impulsive move, therefore, chances of double retracement of this move is likely. Hence prices may witness a sharp pullback towards JPY 310 and JPY 330 levels in coming sessions. On the daily technical setup, the 9-Day RSI and Stochastic (14/3/3) have started drifting higher from the oversold region while the stochastic oscillator has triggered an up cross which is likely to result in continuation of the buying interest. On the lower side, JPY 287 (38.2% Fibonacci retracement levels of the entire rally from Aug12-Feb13 ranging from JPY 204.5- 337.40 levels) would act as firm support in coming sessions while the next major support is pegged at JPY 255 levels (61.8% Fibonacci retracement of the aforesaid rally).

Daily Tocom Rubber Price Outlook and Strategy

On the higher side, JPY 310 levels would act as immediate resistance (around 18 period EMA) while the next resistance is pegged at JPY 330 levels. Concisely, prices are likely to extend the positive streak towards JPY 315 levels with support in place at JPY 287 in forthcoming sessions. RISK PARAMETER RSS3 Bangkok Volatility RSS3 Bangkok AVaR

Mini Charts
Tocom RSS3 spread (JY/Kg) Tocom RSS3 spread (JY/Kg) Tocom RSS3 spread (JY/Kg)

Tocom RSS3 spread (JY/Kg)

Tocom RSS3 spread (JY/Kg)

TOCOM RSS3 Forward curve (JY/Kg)

RSS3 Bangkok Ave Spot prices Historical (US Cents/Kg)

SIR20 & SMR 20 spot prices (US Cents / Kg)

Bangkok RSS3 - TSR 20 spot spread (US Cents / Kg)

Crude oil prices (US $/Barrel)

USD/INR

USD/JPY

Daily Tocom Rubber Price Outlook and Strategy

USD/THB

USD/IDR

USD/MYR

Spot Prices
Grade RSS 3, (THB/Kg) STR 20, (US cents/Kg) SIR 20 (US cents/Kg) SMR 20, (US cents/Kg) Indian NR, Kottayam INR/Qtl RSS-4 RSS-5 ISNR-20 Latex (60% drc) Market Global Natural Rubber Bangkok Bangkok Indonesia Malaysia Mar 08 2013
90.25(0.25) 300(0) 293(3) 290(0)

Mar 07 2013 Kottayam 15900(100) Kottayam 15500(100) Kottayam 15500(100) Kottayam 10260(105) Futures Prices Rubber RSS3 prices in JY/Kg Mar 08 2013 Change Cumulative Cumulative Open (Previous Volume Open High Low Close Interest close)
291.2 295.9 288.7 295.3 6.7(288.6)

Market

Contract Session Day

Electronic 289.0 295.9 288 295.3 6.7(288.6) Day 294.5 298.9 291.4 298.2 6.7(291.5) Aug13 Electronic 292 298.9 290.6 298.2 6.7(291.5) In Tocom, 1 lot = 5 tons. Spread View TOCOM RSS3 (JY/Kg) TOCOM RSS3 (Yen/kg) Expiry Mar'13 Apr'13 Closing Price
279.9 283.4

Jul13

9087

22786

Mar'13
3.5

Apr'13
8.4 4.9

May'13
12.6 9.1

Jun'13
15.4 11.9

Jul13
18.3 14.8

Daily Tocom Rubber Price Outlook and Strategy

May'13 Jun'13 Jul'13 Aug'13
288.3 292.5 295.3 298.2 4.2 7 2.8 9.9 5.7 2.9

Currency Market Update Mar 07 2013 USD vs. JPY USD vs. THB USD vs. INR USD vs. MYR USD vs. EUR USD vs. IDR Dollar Index
94.81(0.75) 29.73(-0.05) 54.45(-0.35) 3.106(0) 1.3104(0.01) 9690(5) 82.081(-0.38)

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