STOCKS
Equities broadly remain positive. Dow sustains above 28000 and has room to rise further. DAX has to breach an immediate resistance to end the consolidation phase and resume the uptrend. Nikkei is gaining strength and is bullish to rise further. Shanghai is consolidating above a crucial support. Sensex and Nifty have key supports which can limit the downside and push them higher.
Dow (28121.68, +55.21, +0.20%) sustains above 28000 and has moved further higher. The bullish outlook is intact to test 28250-28400. As mentioned yesterday, while above 28000 the upside is open to test 28800 in the coming weeks.
DAX (13236.42, -10.03, -0.08%) has to rise past 13300 decisively to gain fresh momentum and move further higher towards 13600 and 14000 in the coming weeks. While below 13300, the index can consolidate between 13100 and 13300 for some more time before breaking above 13300 eventually.
Nikkei (23456.32, +83, +0.36%) sustains higher. The outlook is bullish to see a rise to 24000 and 24800 in the coming weeks. A strong break/close above 23500 will accelerate the rally.
Shanghai (2908.65, +1.59, +0.05%) remains mixed and is continuing to oscillate around 2900 and above the crucial 2890-2880 support zone. While above 2880, the bias is bullish to see a rise to 3000 and 3050 in the coming weeks.
Though Nifty (12037.70, -36.05, -0.30%) has come-off from the day’s high it has good support at 12000 and then at 11965. While above these supports, the outlook is bullish to test 12150 initially and then to 12200-12300 eventually.
Sensex (40821.30, -67.93, -0.17%) on the other hand has supports at 40750 and 40500 which are likely to limit the downside and keep the bullish view to intact to test 41250 on the upside.
COMMODITIES
Commodities are trading higher. Crude prices could test important near term resistances while Gold and Silver has room on the downside. Copper looks bullish while above support.
Brent (64.06) has risen sharply entering into the 64-65 resistance zone. We would keep an eye on the price action within the mentioned zone for the next few sessions. 65 is preferred to hold well as a near term resistance and could produce a short dip pushing back prices towards 62-60 levels again. Only a break above 65, if seen and sustains would we revise our target upwards.
Nymex WTI (58.19) has also risen slightly and has immediate resistance near 59.30 on the upside. Above 59.30, price could be limited to 60 on the upside. We would wait to see price action near respective resistances to decide on further direction. Preference is for resistance to hold on first testing.
Gold (1466.20) has bounced slightly but while below 1475/70, Gold still has scope of falling towards 1440/30 in the near term.
Silver (17.15) is holding above 16.5 just now. Note that 16.5 and 16 are both near term support levels and may hold for now keeping prices higher for the next few sessions at least.
Copper (2.6870) has risen as expected and may continue to rise towards our expected 2.70/75 levels in the near term.
FOREX
Dollar Index (98.31) is almost stable but has immediate resistance near 98.5. While 98.5 holds, we may expect some range trade in the 98.50-97.75 region. Medium to long term view is bullish.
Euro (1.1015) is trading near crucial levels of 1.10. A bounce or break from this support would be important to watch. While dollar index looks bullish, there could be some scope for Euro to fall below 1.10 but for now we may see some range trade in the 1.10-1.11 region.
Dollar-Yen (109.11) has risen sharply in the past 2-sessions and is holding above 108.30 just now. The currency pair could re-test 109.50-110 levels in the near term. View for the next few sessions is bullish.
EUR-JPY (120.19) has immediate support at 119 and while that holds we may expect a possible rise towards 121-122 in the medium term.
Pound (1.2850) continues to trade in the broad 1.30/31-1.28/26 region and is likely to hold so for the near term. Unless a break on either side is seen, it would be difficult to predict further direction.
Aussie (0.6790) is looking bearish towards 0.6750-0.6650 region for the medium term.
USDCNY (7.0265) has support at 7.00-6.95 and while that holds we may expect trade in the 7.05-6.95 region for the near term.
Dollar-Rupee (71.4925) came off to test 71.50 as expected and close near yesterday’s low. Resistance near 71.75 seems to be holding well for now and while that holds, we may expect a further fall towards 71.35/30 in the near term. Note that 71.70/75 would now be important resistance to keep an eye on.
INTEREST RATES
The US Treasury yields are moving down in line with our expectation and can fall further in the coming days. The German yields have dipped but are coming closer to key supports which are likely to halt the current down move and push the yields higher. The 10Yr GoI might remain range bound in the near term.
The US 2Yr (1.60%), 5Yr (1.60%), 10Yr (1.75%) and 30Yr (2.19%) have dipped across tenors in line with our expected. The short-term bearish view remains intact. The 30Yr can fall to 2.15% and 2.12% from where a bounce is possible. Inability to bounce from the 2.15%-2.12% support zone could drag the yield further lower to 2.05%. The 10Yr can fall to 1.70% initially and then to 1.65%-1.63% eventually.
The German 2Yr (-0.65%), 5Yr (-0.60%) and 10Yr (-0.38%) have inched lower while the 30Yr (0.14%) remains stable. The 10Yr is coming closer to its key support levels of -0.40% and -0.43% which is likely to hold and push the yields higher in the coming days. The 30Yr remains stable between 0.10% and 0.15% over the last few days. It has to rise past 0.22% to gain strength and move higher strongly.
The Indian 10Yr (07.26 GS 2029) GOI (6.6350%) is holding above its support at 6.60%. While this support holds, a rise to 6.70% is possible which will then reduce the chances of seeing a fall to 6.55% and 6.50% mentioned yesterday. The possibilities of the yield even being stuck in between 6.60% and 6.70% cannot be ruled out in the near term.
The 10Yr (06.45 GS 2029) GoI (6.4840%) on the other hand looks mixed. It can remain range bound between 6.46% and 6.50% for some time.
