STOCKS
Resistance in Dow (24688.31, -1.19%) near 25000-25250 continues to hold, keeping the Dow in a near term downtrend. Break above 25250 is needed to initiate an upmove towards 25750 or higher in the longer term. While below 25000, chances of testing 24000 are higher.
Dax (11200.62, -0.94%) is trading above 11000 for now and could possibly stabilize a bit in the near term. The weekly support is likely to hold and produce a bounce towards 11600-11800 again in the longer run.
Nikkei (21176.69, -0.037%) too is trading above immediate support near 20800-21000 and while the support holds, Nikkei could either see some ranged movement or rise towards 21800-22000 levels in the near term. A break below 21000 could take it lower towards 20800 but if the index manages to remain above 21000, there could be a sideways range followed by an upmove towards 22000.
Shanghai (2553.08, -1.76%) could see a fall from 2650-2600 levels just now and has scope f re-testing 2450-2400 on the downside. Overall near term trade is likely to range in the 2650-2400 region.
The fall in Nifty is not over yet. Although Nifty (10030, -0.94%) may see some interim corrective upmoves from 10000, there is scope for a fall towards 9800-9700 or even lower towards 9500 in the longer run. We need to remain cautious at current levels and be careful before calling a bottom just now.
COMMODITIES
A corrective fall is likely to be seen in the crude prices for the near term within an overall longer term uptrend. Gold and Copper are likely to remain stable.
Brent (77.62) has immediate channel resistance at 78 as seen on the daily candles chart which if holds, could push the Crude price back towards 76-75 levels in the near term. At the same time looking on the 3-day and weekly charts, long term trend support near 74-76 region looks strong and could eventually take the prices higher back towards 80 in the longer run.
WTI (67.64) also has similar resistance near 68 and while that holds, a near term fall back towards 65 is possible. For the near term we do not look at a fall below 64 on the WTI.
Gold (1235.90) and Copper (2.7450) are trading almost stable. Gold is unable to break above 1240 and Copper is trading in the 2.65-2.80 region, slightly tilting towards the downside. The momentum is very low for both the metals just now but we could see a sharp movement soon on either side from the current levels.
FOREX
Euro, Pound and Aussie could all see an upmove early in the week towards 1.145, 1.305 and 0.715 and then come off from there. USDINR has crucial support near 73.10-72.90.
Euro (1.1395) closed above 1.14 last week after having seen a low of 1.1336 – this has kept open the possibility of a rise towards 1.145, which could happen in the next couple of sessions. Resistance on daily candles at 1.145 could then make Euro come off towards 1.13 again.
Dollar Index (96.44) could dip towards 96.2 in the early part of the week and then rise back again later. On weekly line chart, it still looks bullish in the weeks ahead.
Dollar Yen (111.85) has broken support at 112 and could now move down in this week towards lower support on daily candles near 111.25-50.
Euro-Yen (127.45) tested crucial support near 126.6 on weekly candles last week and is currently trading slightly above that support. While below 128.5-129.0, it could break 126.6 and test lower support near 125.5-126.0 in this week/by next week. Dollar Yen @ 111.25 and Euro-Dollar @ 1.13 gives 125.71 on Euro Yen.
Pound (1.2833) : There are immediate supports at 1.28 and lower down at 1.27 (on daily line chart) which could restrict the downside in this week. It might range for a few sessions between 1.305 and 1.28. A break above 1.305-1.310 would be required to negate the downside in the near term.
Aussie (0.7099) had broken below the crucial support at 0.705 to see a low of 0.702 on Friday but closed above the support near 0.7089. It is now breaking above resistance near 0.708 on daily candles – if this break sustains, it could move up to test higher resistance near 0.7150-0.7175 in this week.
Dollar Rupee (Friday on shore closing: 73.46; current offshore NDF: 73.09) – A break below 73.10-72.90 could lead to a deeper correction. If Euro weakens towards 1.13 again, the support at 73.10-72.90 might hold for USDINR.
INTEREST RATES
The US 10-5 yr yield spread (0.17%) is trading at immediate resistance near current levels and if that holds the spread could come off towards 0.15% or lower in the coming sessions. This indicates a sharper rise in the 5Yr yield (2.91%) compared to the 10Yr (3.08%) in the next few sessions.
The US 5YR (2.91%) is trading at current support levels and could see a bounce back towards 3% or higher just now. A break below the current support is needed to bring in a bearish view for the medium term. The 10Yr (3.08%) and the 30Yr (3.32%) yields had fallen sharply last week and look weak for the longer term. While there could be some immediate corrective bounce from current levels, the yields look weak in the longer run. The 10yr could head towards 3% on a break below 3.08% if seen in this week.
The Japan yields are trading low. The 5YR (-0.08%) could come off towards -0.098% while the 10YR (0.12%) and the 30YR (0.87%) could also come off towards 0.10% and 0.85% in the next couple of days. Near term looks weak.
The UK yields continue to fall sharply. The 10Yr (1.24%) has been falling from resistance near 1.60% to current levels in October and while the immediate support near 1.25% has broken, the yield may head towards 1.16% in the near term. The 5Yr (0.98%) and 20Yr (1.78%) also looks weak for the next few sessions.
