STOCKS
Most indices have rallied well and indicate near term bullishness from current levels. Dow and Dax can test 36000 and 15900-16000 respectively while Nikkei and shanghai can rise towards 29750-31000 and 3600. Nifty and Sensex can test 18400/600 and 62000 before falling from there.
Dow (35294.76, +382.20, +1.09%) has surprised by rising above 35000 contrary to our expectation of a fall to 34000-33750 before bouncing from there. While above 35000, we may look for a rise to 36000 on the upside. View is bullish above 35000.
DAX (15587.36, +124.64, +0.81%) has risen in line with our expectation of a rise towards 15400/500. Breaking above 15500, the index could soon be headed towards 15900-16000 in the near term before pausing there.
Nikkei (28987.66, -80.97, -0.28%) is trading in the red today but t relatively higher levels than seen last week. Immediate resistance is seen near 29500-29750 with upper resistance seen at 31000. View is bullish for the medium term.
Shanghai (3564.98, -7.85, -0.22%) has dipped a bit but could trade within 3500-3575/3600 region both being immediate support and resistance levels. A break below 3500, if seen can drag the index down to 3450/3425 before rebounding from there as 3600 looks like a strong resistance just now.
Nifty (18338.55, +176.80, +0.97%) has rallied well last week, breaking above 18250 and rising towards our expected 18400/600 region. The resistance at 18400 and 18600 are still intact and can send the index down towards 18000/17800 in the coming weeks before we see an eventual rise above 18400 again. Any break above 18600 if seen in the near term is strongly bullish for Nifty for this week.
Sensex (61305.95, +568.90, +0.94%) has risen sharply beyond our mentioned 61000.The index now has resistance at 62000 which can hold and we can see a corrective fall towards 60,000 soon.
COMMODITIES
Crude prices continue to rally as demand picks up and there is a possible energy crunch globally. But on the charts we would caution going longs at current levels as upside could be limited. Brent is trading just below 86 and could face rejection else would rise to 86.48-87.36 before falling from there. WTI on the other hand can test 84-85 before falling off. Gold has fallen sharply but watch support at 1760/50 today. Silver has scope to rise to 24-24.50 while Copper has rallied well in a bullish break out and has scope to test 4.90 before reversing from there.
Brent (85.61) rose on Friday, breaking above $85 as news stated supply deficit forecasts for the next few months. As the economy is now recovering back from the pandemic, crude demand is likely to pick up. Adding to this, the falling US stockpiles may continue to keep global supply tight. According to the IEA (International Energy Agency) the current situation may boost oil demand by 500,000 barrels per day that would lead to a possible supply gap of around 700,000 bpd.
Brent has come into the 85-86 resistance zone and any break above 86 can take it higher towards 86.48-87.36 on the upside (resistances on the log charts) before a reversal is seen from there. We would be cautious at going longs and instead expect limited upside from here.
WTI (82.72) has broken above 81-82 contrary to our expectation of seeing a decline from 81-82 resistance zone. This opens up chances of testing 84-85 on the upside before a fall from there is expected. Immediate view is bullish towards 85 but we would be cautious to see a reversal anytime soon.
Gold (1771.10) has again dipped back from 1800 surprisingly, entering the 1740-1780 region. Watch immediate support near 1760/50 today.
Silver (23.44) has risen well and a rise to 24-24.50 cannot be negated before a dip is seen.
Copper (4.7460) has risen sharply indicating a bullish break out and has scope to test 4.90 on the upside before reversing from there. Immediate view is bullish.
FOREX
Dollar Index has immediate support near 93.75/60 which while holds could keep near term bullishness intact. Euro has resistance near 1.1625 and while below it, there is scope for a fall to 1.16. EURJPY can dip to 131.50 before rising again as Dollar Yen continues to rally towards 115n which if breaks can head towards 117 in the medium term. Aussie and Pound are stable and could be ranged for sometime below 0.7450 and 1.38 respectively. USDCNY can slowly fall towards 6.41. USDINR needs to fall and sustain below 75.10 to head lower and indicate that a near term top is in place.
Dollar Index (94.07) can test immediate support near 93.75/60 before rising back from there. Uptrend is intact while above 93.60.
Euro (1.1583) dipped back below 1.16-1.1625 and while the fall sustains, a further decline towards 1.1550 or lower is possible.
EURJPY (132.38) tested 132.77 from where a dip is seen. A corrective fall to 132-131.50 looks possible before again rising higher.
Aussie (0.7403) is holding below 0.7450 and while Aussie trades lower, it is bearish for the near term.
Pound (1.3730) rose above 1.37 on Friday and now holds below 1.38. A fall to 1.37-1.3690 looks possible before another bounce is seen in the medium term.
Dollar-Yen (114.26) has been rallying, within a bullish break out after a long sideways correction. Above 114, a rise towards 117-118 looks possible. Before that watch interim resistance at 115 which if holds can produce a small corrective dip.
USDCNY (6.4383) looks stable today. A possible downside to 6.41 in the near-term and even towards 6.3750 cannot be negated unless a decisive break above 6.44/45 is seen.
USDINR (75.03 on offshore) trades below 75.10 on the offshore despite rise in Crude prices. We need to see if the onshore rates too open below 75.10 that would open up chances of a fall towards 75-74.80/60 in the near term. While above 75, we may keep possible bounce back to 75.30/40 alive in the near term. Watch price action near current levels.
INTEREST RATES
The US Treasury Yields have risen back well especially at the near end (2Yr and 5Yr) on Friday possibly on the back of the rising crude oil prices. A retest of the crucial resistances on the 10Yr (1.65%) and 30Yr (2.2%) looks likely but it will have to be seen if the yields can reverse lower from these resistances again. Watch if Brent crude is reversing lower from its 85-86 resistance region or not. The German yields remain lower below their crucial resistances. We expect the yields to see a fresh fall in the coming days and keep the long-term downtrend intact. The 10Yr GoI has bounced-back but has strong resistance which can cap the upside and trigger a fresh fall going forward. The 5Yr GoI retains its range and can move up within it. But the broader bias is bearish to see a downside breakout of its range eventually.
The US 2Yr (0.41%), 5Yr (1.14%) and the 10Yr (1.58%) had risen-back well on Friday while the 30Yr (2.05%) %) is stable. A revisit of the crucial resistances at 1.65% (10Yr) and 2.2% (30Yr) is likely now. We reiterate that a strong fall below 1.5% (10Yr) and 2% (30Yr) is necessarily needed to turn the outlook bearish and drag the yields lower. Else the chances of a rise to past 1.65% (10Yr) and 2.2% (30Yr) will remain alive.
The German 2Yr (-0.70), 5Yr (-0.52%), 10Yr (-0.17%) and 30Yr (0.28%) yields remain lower below their crucial resistance levels of -0.1%/-0.05% (10Yr) and 0.35%/0.45% (30Yr). We expect these resistances to hold and retain our view of seeing a fresh fall to -0.2% (10Yr) and 0.2% (30Yr) initially and then further deeper eventually over the medium-term.
The Indian 10Yr GoI (6.3280%) has bounced-back on Thursday last week and could retest the 6.35%-6.36% resistance region. However, we expect 6.36% to be a cap on the upside and the yield is likely to see a fresh fall towards 6.26%-6.25% initially and then to 6.2% and lower eventually over the medium-term. A break below 6.3% can trigger this fall.
The 5Yr GoI (5.6732%) sustains above 5.66% and retains the 5.66%-5.76% range. While above 5.66%, a rise within the range cannot be ruled out. However, the bias is bearish to see a downside break out of this range below 5.66% and a fall to 5.62%-5.6% eventually.
