STOCKS
Equities have moved up well. Dow and Dax can rise towards 36500-37325 and 16400 respectively while Nikkei can test 31000 on the upside. Shanghai needs to sustain above crucial support in order to move up towards 3550 and higher. Nifty and Sensex looks bullish for the near term from current levels. Overall view is bullish for the next few sessions.
Dow (36327.95,+203.72, +0.56%) has surprised us by breaking above our expected resistance at 36100. The index can now target 36500, possibly even 37325 on the upside now. Overall view is bullish for the near term.
DAX (16054.36, +24.71, +0.15%) has broken the level of 16000 as well, and while above 16000 the view remains bullish to see a test of 16400 on the upside which is the next crucial resistance to keep an eye on.
Nikkei (29590.57, -21.00, -0.071%) has come down slightly. The view remains bullish to see a test of 30000/31000 while above 29500.A dip below 29500 if seen can take the index down towards 28000, negating our bullish view. In the medium term 31000 is an important and crucial resistance that can hold.
Shanghai (3493.63, +2.06, +0.059%) bounced back after testing the support at 3475/50.Our view is bullish to see a rise towards 3550 in the coming sessions. However, if the index falls below the support region of 3475-3450 then a fall to 3400/3375 cannot be negated. Watch price action near 3450/75 in the very near term.
Nifty (17916.80, +87.60, +0.49%) went up on Nov 4th, holding above support at 17600 and reducing chances of a possible fall to 17400 now. While 17600 holds, Nifty can rise towards 17800-18000 on the upside. There are higher chances of break above 18000, which could then target 18500.
Sensex (60067.62, +295.70, +0.49%) is bullish while above 60000 to see a rise towards 61000/62000 eventually.
COMMODITIES
Commodities have bounced well and could trade higher. Gold is bullish towards 1835/50 while Silver can rise to 24.65-25. Copper can rise towards 4.50/60. Brent and WTI can remain within 80-85 and 78-85/86 region for a few days.
Brent (83.78) and WTI (82.29) have risen as OPEC+, agreed on Thursday to stick to their plan to raise oil output by 400,000 barrels per day from December. Brent dipped to 80.26 last week. We expect resistance at 84/85 to hold for now and keep a range of 80-85 for a few days. WTI can remain within 78-85/86 region for sometime.
Gold (1819.40) and Silver (24.30) have surprisingly risen last week, stronger than expected. We now look for a possible rise to 1835/50 on Gold on a break above 1820 and a possible rise to 24.65/25 on Silver.
Copper (4.3625) has also bounced back and can rise towards 4.50/60.
FOREX
Currencies seem mixed just now as most of them have fallen and have supports coming up which could hold for the near term. Dollar Index can trade within 93.50-94.70-95.00 for the near term before breaking on either side while Euro looks bearish while below 1.16 for a test of 1.15-1.1490 on the downside initially. Overall trend looks bearish for Euro. EURJPY has bounced from 130.83 and may hold for a few sessions before again coming off from there. Pound and Aussie look bearish after a brief sideways consolidation initially. USDCNY can range within 6.3750-6.42 while USDINR can fall towards 74.20/74.00 in the near term.
Dollar Index (94.305) has immediate resistance near 94.70 and while that holds we may expect an initial rise to 94.70 before falling from there towards 94-93.50 on the downside. Overall range of 94.50-94.70/95.00.00 is likely to hold for the near term. Unless a break on either side of the range is seen, it would be difficult to see further movement beyond the mentioned range.
Euro (1.1558) tested 1.1513 yesterday before bouncing back slightly from there. Any bounce from 1.15 or near is likely to be limited to 1.16 for now before a sharper fall towards 1.15-1.1493/90 is seen initially and eventually a fall to 1.14 in the coming weeks. Overall trend remains bearish for Euro in the near term.
EURJPY (131.31) has bounced from 130.83 and while that holds, a rise towards 131.50-131.80 looks likely before again falling back towards 131-130 in the medium term.
Aussie (0.7392) bounced back sharply from 0.7350 but may range within 0.7350-0.7450 for the very near term before possibly breaking on the downside.
Pound (1.3476) fell sharply last week following the surprise decision by the Bank of England not to raise interest rates but it could in the coming months. The support mentioned near 1.3550 ha been broken sharply and while the Pound sustains lower, we may expect a test of 1.3320 before a reversal is seen. But some corrective bounce also looks possible from 1.34 in the near term. For now the bears look more strong and dominating the price that could keep pressure intact on the downside.
Dollar-Yen (113.60) came off sharply from 114.28 in the last couple of days and now looks likely to be ranged within a narrow range of 113.0/25-114.13/25 region. Any break on either side would then give clarity on further direction from here. The narrow ranged mentioned is within the broader range of 113-115 mentioned last week. Watch price action on a fall to 113.
USDCNY (6.3982) continues to remain ranged within 6.3750/38-6.42 for the near term.
USDINR (74.46) broke below 74.50 last week before closing for the Diwali holidays and had closed at 74.46 on the onshore market but as the nation celebrated Diwali, USDINR on the NDF declined and currently shows 74.19. This is holds can possible indicate a gap down opening for Dollar-Rupee today on the onshore markets and see an eventual fall towards 74 on the downside.
INTEREST RATES
US Treasury Yields have come-off sharply across tenors last week. There is room to dip further to test their near-term supports from where a corrective bounce is possible. The broader view remains bearish to break the supports eventually and see a deeper fall over the medium-term. The German Yields are coming down as expected and are keeping our bearish view intact. The yields can fall further in the coming days. The 10Yr and 5Yr GoI can oscillate in a sideways range for some more time.
The US 2Yr (0.41%), 5Yr (1.07%), 10Yr (1.47%) and the 30Yr (1.90%) Treasury yields have come-off sharply across tenors on Friday. The 10Yr has dipped below 1.5% and can now test 1.4%-1.35% on the downside while it remains below 1.5%. The 30Yr on the other hand can test 1.8%-1.75% on a further fall below 1.9% from here.
The German 2Yr (-0.75%), 5Yr (-0.59%), 10Yr (-0.28%) and the 30Yr (0.06%) have come down sharply towards the end of last week. The 10Yr has broken below -0.2% as expected and can now head down to -0.3% and -0.4%. The 30Yr has come down towards 0.05% in line with our expectation. A bounce from the 0.05%-0% region to 0.1% is possible before the 30Yr declines below 0% eventually.
The India 10Yr GoI (6.3577%) can remain in the 6.3%-6.4% range for some more time. We reiterate that 6.43%-6.45% will be a cap on the upside and a fall to 6.2% and lower levels is likely to be seen over the medium-term. A break below 6.3% will pave way for that fall.
The 5Yr (5.7271%) GoI on the other hand is stuck between 5.7% and 5.78%. We will have to wait for a breakout of this range to get a clear picture on whether the 5Yr can move up to 5.82%-5.85% or fall to 5.66% and lower.
