Base metals complex gained sharply on Friday as the dollar dove against the euro and economic optimism remained upbeat after a batch of data suggested the global recession may be easing. Lead and Nickel were up by more than 3% on LME.

London Metal Exchange warehouse Copper stocks slipped 4,850 tonnes to 312,275 tonnes on Friday. Canceled warrants -- metal set to leave warehouses -- dropped to
38,825 tonnes from 43,650 tonnes in the previous session.

Buying from China this year has eaten into LME copper stocks and helped copper prices more than double in value in the year to date, but analysts say demand is starting to subside as the world's biggest consumer eases off a restocking drive.

Japan's exports of refined copper in April rose 154 percent from a year earlier to 65,879 tonnes, the seventh straight month of increases, helped by demand in China, Ministry of Finance data showed.

Japan's exports of refined zinc in April amounted to 13,098 tonnes, up 106 percent from the same month a year earlier, Ministry of Finance data showed.

Base Metals: Stronger than expected Chinese PMI may lead to further upside in industrial metals. In spite of concerns of falling cancelled warrants in copper and rising inventories of Aluminum, we believe that weaker dollar and stronger PMI may trigger fresh round of buying in base metals. We recommend buying base metals during the day. Nickel looks the strongest amongst base metals. Copper, zinc and lead too look good for buying.

Copper managed to break the resistance of 225 levels in the previous week. Thus, copper looks positive above 225 levels. The +DI and –DI are on the verge of cross-over, the bias remain on the positive as the prices are rising above 225. The MACD is seen moving close to Zero line. Thus, most of the indicators are expected to remain positive for Copper today. Thus, one can buy copper at lower levels around 230 targeting 236 and 238 on upside, with Sl of 225. Copper can be bought at every dips above 225 for the day.

Nickel prices are trading at levels of 660-66. This is the resistance for nickel. However, looking at the indicators like rising ADX and +DI and Cross-over of MACD on upside; Nickel is expected to breach this resistance at 666 levels. Thus, one can buy Nickel during the day at lower levels around 658-660, targeting 672 and 675 for the day.