STOCKS
Most Indices seem to have staved off the acute bearishness that prevailed towards end-October, but are hesitating to move up further immediately.
We had outlined a broad range of 25000-27000 for the Dow (25989.30, -201.92) for the next several days. Within this, there was a bit of profit taking on Friday, which could well extend down to 25500 this week. On the higher side, allow for 26500 in case the market goes up. The essential thing is, the market is likely to be ranged for some days.
The DAX (11529.16, +1.84) was quiet on Friday, and might be consolidative for a few days while it makes up its mind to move up towards 11800 in the medium term, given that it has possibly found long-term Support at 11051.04 on 26th October.
The Nikkei (22246, -236.67) dippped a bit on Friday, as expected. Some more near-term dip might find medium-term Support at 22000. Long-term Support seen at 21500-250.
On the Shanghai (2596.05 -1.39%), although the downtrend since 3600 (Jan-18) still persists, the bounce from 2449.20 on 19th October is also signicant in the long-term. It suggests that current near-term dips could find Buyers in the 2550-2500 region.
Among all the Indices, the KOSPI (2079) looks the most bearish while it is unable to rise past 2100-20. Still, like the others, it could find Support on dips into the 2050-2000 region.
The Nifty (10585.20, -13.20) saw a minor dip on Friday, is quoting slightly lower on the NGX today, but may well find Buyers on dip towards 10400 over the next few days. Similarly the Sensex (35158.55) could dip towards 34000 and attract Buyers there.
COMMODITIES
Brent (71.03) could rise towards resistance near 71.50-72.00 on daily candles in this week. A break above 72, if it happens, might establish last week’s 69.13 as a medium term low for Brent.
WTI (60.77) : There is immediate resistance for WTI near 61 and higher resistance on daily candles near 62. On 3 day and weekly line chart, there still appears to be some scope of a downmove towards 58 before it rises decisively again.
Gold (1211) could possibly fall a little more towards support near 1200 on 3 day and weekly candles before rising from there.
Copper (2.6970) could fall more towards support near 2.65 on daily candles in this week.
FOREX
Watch 1.13 on Euro. Global Dollar strength might still restrict the downside for USDINR above 72.44 (or max, above 72.20).
Dollar Index (96.98) could face some resistance near 97.20-25. However, preference is for a break above that level. Higher up there could also be some channel resistance near 97.50 on 3 day candles.
Euro (1.1328) has crucial horizontal support coming up near 1.13. Looking at the weekly line chart, the preference is bearish for the weeks ahead – that is, a break below 1.13 is possible.
Dollar Yen (113.98): While above support on daily candles near 113.75, Dollar Yen could still rise higher towards resistance near 114.5 on daily line chart in the next 1-2 weeks.
Euro-Yen (129.13) : The bias on Euro Yen has turned bearish with the break of support near 129.25 on daily candles. It could now move down targeting support levels near 128-127 over the next couple of weeks.
Pound (1.2939) came off after testing a high of 1.3175 last week and could now move lower towards support zone near 1.28-1.27 over the next 1-2 weeks.
Aussie (0.7233) : There could be some support for the Aussie near 0.7175-0.7150. A break below those levels would be quite bearish. Only a decisive break above 0.73 would change the bias from bearish to bullish.
Dollar Rupee (72.77) has opened higher. Global dollar strength in this could prevent further downside below 72.44-72.20.
INTEREST RATES
Friday saw the US 10Yr (3.18%) dips a bit from the post-FOMC 3.22%, perhaps reflecting the dip in the Brent (69.88) below 70. As mentioned, there is good medium-term Resistance at 3.30%. Need to see how far down the US 10Yr will fall if Brent continues to move down towards $65. Long-term Support available near 3.05%.
Even the German 10Yr (0.40%) and Japanese 10Yr (0.11%) have dipped from 0.45% and 0.12% respectively, contrary to our expectation of a rise towards 0.53% and 0.16% respectively. But, while the German 10Yr could move sideways for a while, the Japanese 10Yr may have Support near current levels.
The 10Yr GOI (7.77%) is coming down to test important Support at 7.75%. A break thereof could be very bullish for Indian bonds, possibly attracting foreign buying again, with a lower Crude being directly beneficial for lower Indian inflation.
