Base metals complex edged up during the day on the back of the weaker dollar and better demand expectations arising from encouraging weekly jobless claims and business productivity data from U. S.

Aluminium lost over 5% on MCX and LME in the last session.

Goldman Sachs said U. S. auto sales were likely to improve in the second half of 2009. Fewer U. S. workers filed new claims for jobless benefits for a third straight week last week and non-farm productivity was up at a stronger-than-expected pace.

London Metal Exchange Copper warehouse stocks shed another 3,325 tonnes to 303,200 tonnes on Thursday. Canceled warrants -- metal set to leave warehouses -- fell to
34,600 tonnes from 37,550 tonnes the previous session.

International Royalty Corp Reports first copper production at Las Cruces. Freeport-McMoRan Copper & Gold Inc sees no sign of recovery in the developed world that would lead to a restart of its idled U. S. copper operations, despite a pick-up in Chinese buying.

Base Metals: Base metals may continue the last day’s rally which took place against the expectations of better demand arising from improving economy. We recommend buying Aluminium as some short covering was seen in it last day and it may rise further from here. We also expect an upside in Copper, Zinc and Nickel. So one can buy Copper, Zinc, Nickel and Aluminium at dips.

Aluminium rose sharply yesterday after breaking the downward trend. The RSI is rising and the MACD has given a cross over on upside. In addition, +DI has given a cross over with –DI, with increased volumes. Thus, most indicators signal an upside break-out in Aluminum. One can buy Aluminium at every dip between 67-70, targeting 76-78 on the upside in near term.

Copper prices pulled up later in the session yesterday, taking support near the previous low of 230-312 levels. Prices are expected to remain upside for the day. Thus, one can buy copper around 235-37, targeting 242-45 on the upside. The ADX and RSI are still supporting the uptrend in copper.

Nickel prices pulled back higher yesterday, taking support near the previous session’s bottom. The uptrend still looks intact in Nickel. Thus. One cam buy nickel at dips around 685-90, targeting 710-715 on the upside.

Zinc prices are talking support at the 71 levels. The MACD also has entered in the positive territory. Thus, one can buy Zinc at every dip above 71, targeting 77-78 on the upside.