STOCKS
Indices like the Dow, Shanghai, Sensex and Nifty broadly remain mixed and seem to lack clarity in the short-term. An intermediate dip in these indices cannot be ruled out before their broader uptrend resumes. Nikkei and DAX remain bullish and strong among the lot. They both can move higher.
Dow (26833.95, +45.85, +0.17%) remains stable below 27000 over the last few days. The near-term outlook is mixed. While below 27000 a dip to test 26500-26400 on the downside cannot be ruled out. A strong rise past 27100 will only bring back the bullishness.
DAX (12798.19, +43.50, +0.34%) sustains above 12600 and keeps the broader bullish view intact. We expect the DAX to target 13000-13200 in the short-term. 12600 and 12400 are key supports.
Nikkei (22759.12, +133.74, +0.59%) risen breaking above 22650 and has avoided the corrective fall mentioned yesterday. Our first target of 22700 has been attained and the Nikkei could now gear-up to test 23000-23100 from where a corrective fall is possible.
Shanghai (2951.86, +10.24, +0.35%) continues to hover around 2950 and looks mixed. It has equal chances to either move up towards 3000 or fall to 2920-2900 from current levels. We will have to wait and watch.
Nifty (11604.10, +15.75, +0.14%) has closed on a mixed note yesterday. While below 11700, an intermediate dip to 11470-11400 cannot be ruled out before a fresh leg of upmove begins. A strong rise past 11700 is needed to bring back the bullishness.
Sensex (39058.83, +94.99, +0.24%) on the other hand is vulnerable to test 38600-38550 while it trades below 39250. Sensex has to rise past 39400 to regain momentum.
COMMODITIES
Commodities are mixed. Gold and Silver seems to trade sideways while crude prices and Copper could test immediate resistance on the upside.
Brent (60.83) and WTI (55.51) have moved up to test the higher limits of our mentioned range of 61-58 and 56-53 respectively. The rise in prices came in after an unexpected fall in US stockpiles by 1.7mln barrels during the week ended 18th Oct. A break above 61 and 56 respectively if seen on Brent and
WTI could turn bullish for the medium term. Watch price action above current levels. Preference is for the downside.
Gold (1495.30) and Silver (17.56) are stuck in a narrow range and needs to break on either side of the 1500-1480 and 17.0-18.0 region to move further on either direction. Preference is for a test of lower limit of the mentioned range in the near term.
Copper (2.6665) may test resistance at 2.70 before falling from there in the medium term. A rise past 2.70 is not expected just now.
FOREX
Dollar Index (97.42) could not rise back above 97.65 and has dipped again. A re-test of 97 could be on the cards but while above that, Dollar Index would have scope to rise towards 98.0-98.85 in the medium term.
Euro (1.1137) is holding well above 1.11 and while that holds, there could be scope of testing 1.12 before falling off eventually.
Dollar-Yen (108.59) is stuck in a narrow range above 108 but is unable to rise sharply breaking above 109. While support at 108 holds, Dollar-Yen could rise towards 110 in the medium term.
EUR-JPY (120.93) is holding below 121.50 and has scope of falling towards 120-119 in the near term. Below 121.50, the currency pair looks bearish.
Pound (1.2915) has risen slightly and may possibly re-test 1.30 on the upside. Our expectation of a fall towards 1.28-1.2750 in the near term remains intact.
Aussie (0.6845) looks bearish towards 0.68 or lower while below resistance at 0.69. Watch price action near 0.69.
The USDCNY (7.0638) is likely to hold above support at 7.04 and trade within 7.04-7.10 region for a few sessions.
Dollar-Rupee (70.9150) tested levels above 71 yesterday before coming off to close lower. Although our view of an initial test of 70.75 followed by a fall towards 70.50/35 holds for the medium term, we may have to allow for a possible rise towards 71.13 or even 71.19 in the near term which could then delay our expected fall.
INTEREST RATES
The US Treasury yields hover around their key near-term supports. It has to be seen if these supports can hold or not. German yields remain stable within its overall uptrend and keeps the broader bullish view intact. The 10Yr (07.26 GS 2029) GOI continues to remain mixed and can be range bound in the near term.
The US 2Yr (1.58%), 5Yr (1.58%), 10Yr (1.76%) and 30Yr (2.25%) Treasury yields remained lower but stable. The 30Yr is hovering around its key support level of 2.25%. Whether it moves up towards 2.30% or fall to 2.20% in the coming sessions will decide the next direction of move. The 10Yr on the other hand has support at 1.70% which has to hold in order to avoid a fresh fall.
The German 2Yr (-0.67%), 5Yr (-0.62%), 10Yr (-0.40%) and 30Yr (0.11%) remains stable within their overall uptrend. The broader bullish view remains intact. The 10Yr can test -0.30% and the 30Yr can move up to 0.30% on a strong break above 0.20%. However, an intermediate dip or a consolidation cannot be ruled out before we see a fresh rise.
The 10Yr (07.26 GS 2029) GOI (6.6859%) continues to remain mixed . It can remain range bound between 6.65% and 6.75% and a breakout on either side of this range will determine the next leg of move.
The 10Yr (06.45 GS 2029) GOI has dipped and closed lower at 6.5081% yesterday as compared to 6.5434% on Tuesday.
