STOCKS
Equities look mixed. Dow, Sensex and Nifty are stuck in a narrow range. Dow is holding above 28000 but needs to break above 28500 to move up further and avoid a fresh fall from here. Sensex and Nifty look mixed and will have to break their respective range of 39500-41000 and 11600-12100 on the upside to see a fresh rise. Nikkei looks vulnerable to break 23500 and fall to 23000 and even lower. Shanghai has declined sharply and can now test the lower end of its 3180-3450 range after which a bounce is possible.
Dow (28335.57, −28.09, -0.1%) is stuck in between 28000 and 28500 over the last few days. We retain our broader bearish view of seeing a fall to 27500-27000. However, if the Dow manages to break above 28500, a rise to retest the 29000-29100 is possible again which in turn will delay the above mentioned fall to 27500-27000.
The 12400-12350 support zone on the DAX (12645.75, +102.69, +0.82%) is holding well. The danger of seeing a deeper fall to 12000 and lower levels seems to have eased. A further rise past 12800 will increase the chances of seeing a rise back to 13000-13200 levels. However, inability to break above 12800 from here will keep the index pressured to break 12350 and fall to 12000 and lower levels going forward.
Nikkei (23516.02, −0.57, -0.002%) seems to lack strength for a strong bounce although it is managing to sustain above 23500 and is keeping the 23500-23800 range intact. However, the bias on the chart is weak and the Nikkei can break 23500 decisively and fall to 23000 initially and even 22500-22000 eventually in the coming weeks. We will have to wait and watch.
Shanghai (3258.76, −19.24, -0.59%) has declined sharply breaking below 3300. A test of 3200-3180 is possible in the next few days and we expect Shanghai to bounce-back thereafter. We expect the 3180-3450 range to remain intact.
Sensex (40685.50, +127.01, +0.31%) and Nifty (11930.35, +33.90, +0.28%) are stuck in a narrow range and continue to remain mixed. A strong rise past 41000 on Sensex and 12100 on Nifty is needed to boost the bullish momentum and see a rise to 42000 (Sensex) and 12250-12500 (Nifty). Else the indices can remain in the range of 39500-41000 (Sensex) and 11600-12100 (Nifty) or within the current narrow range of 40000-41000 (Sensex) and 11800-12000 (Nifty) for some more time before a clear trend emerges. The bias is positive to see an upside breakout above 41000 (Sensex) and 12100 (Nifty) eventually. We will have to wait and watch.
COMMODITIES
Commodities are down today. Crude prices may head lower while Copper may bounce back from 3.10. Gold has immediate support at 1880 and lower support at 1840 which could be seen testing in the next few sessions. Silver is bullish while above 24.
Brent (41.18) and Nymex WTI (39.27) have both dipped again indicating ranged sideways movement to continue for some more time now. Brent is holding well below 43 and could fall towards the previous support at 39.30 before bouncing back from there. WTI on the other hand, could trade within 36-42.50 with possibility of testing the lower end of the range. View is ranged for now with a possible dip from current levels to be seen initially.
Gold (1901.50) has dipped but is almost stable around 1900. Near term could be bearish towards 1880, a break below which could open up chances of a further fall towards 1840. Silver (24.46) has immediate trend support on the daily candles near 24.40/30 which if holds could produce a bounce towards 25 initially. In the longer run, there is scope for a rise towards 27.
Copper (3.1290) has dipped as expected and could test 3.10 before bouncing back from there towards 3.20. For the near term, 3.20 is an immediate resistance with 3.10 and 2.95 as the lower cap. Watch price action near 3.10.
FOREX
Dollar Index (92.746) has scope to fall towards 91.95 from where a bounce looks possible. View is bearish while below 93.45. This could be positive for Euro, EURJPY but could drag down Dollar Yen from current levels.
Euro (1.1835) looks stable while below 1.19. We may expect ranged trade within 1.19-1.1775 region.
EURJPY (124.10) has immediate trend support at 123.22 which if holds could take the pair higher towards 125 or even 126 on the upside soon. While above 123.22 view is bullish.
Dollar-Yen (104.84) trades higher and above the immediate support at 104.50. While above the support, we may expect Dollar Yen to slowly inch up towards 105-106 again soon.
Aussie (0.7118) looks stable below 0.72 and could remain within 0.70-0.72 region for some sessions.
Pound (1.3027) has room to dip towards 1.2950 or even towards 1.2864 on the downside while below 1.32. We may expect a bounce from 1.2950 initially before a possible fall towards 1.2864 looks likely.
USDCNY (6.6824) could test 6.70 on the upside which is a decent resistance from where a dip could be seen again towards 6.68/65 in the medium term.
USDINR (73.6250) may open with a gap up after the news of the RBI governor tested Covid positive. Our earlier resistance mentioned at 73.80 if breaks on the upside could lead to a test of 74 on the upside before a decline again sets in towards 73.50 and lower. For today watch if 73.80 breaks on the upside.
INTEREST RATES
The US Treasury yields have come-off sharply from levels seen on Friday. A break below intermediate supports can drag the yields lower this week. The price action over the next few days needs a close watch. The German yields remain stable and keep alive the chances of seeing a corrective bounce before resuming the overall downtrend. The 10Yr GoI has tumbled breaking below its key support and has room to fall further.
The US 2Yr (0.15%), 5Yr (0.36%), 10Yr (0.81%) and the 30Yr (1.61%) Treasury yields have come-off sharply from levels seen on Friday. A strong break below 1.60% on the 30Yr and 0.80% on the 10Yr will be bearish to see a fall to 1.50% (30Yr) and 0.70% (10Yr) in the coming days. The 10Yr and 30Yr will have to sustain above 0.80% and 1.60% respectively in order to move to test 0.90% and 1.72% again on the upside. We will have to wait and watch.
The German 2Yr (-0.77%), 5Yr (-0.78%), 10Yr (-0.58%) and the 30Yr (-0.16%) yields remain stable above their intermediate supports. As mentioned on Friday, while above -0.60% (10Yr) and -0.20% (30Yr) a corrective bounce to -0.50% (10Yr) and -0.10% (30Yr) is possible in the coming days. Thereafter the overall downtrend can resume and a fresh fall to -0.70% (10Yr) and -0.35% (30Yr) can be seen over the medium-term.
The 10Yr GoI (5.8433%) had tumbled breaking below the key support level of 5.8850% on Friday. Our broader bearish view remains intact and a test of 5.80% is possible now. The chances of the fall extending even up to 5.75% cannot be ruled out before a bounce-back move happens.
