STOCKS
Equities are still vulnerable.Dow Closed above 36000 on friday but danger of falling towards 35000 still remains.Dax can consolidate between 15900-16100 in the near term.Nikkei has risen above 29750,it needs to sustain above 29750 to rise towards 30000/31000.Shanghai has resistance at 3575 which needs to be broken to move up further.Nifty closed above 18000 on friday, a strong and sustained break above 18200 can take it towards 18400/500.Sensex can rise towards 61000, while above 60000.
Dow (36100.31, +179.08, +0.50%) closed above 36100 on Friday, but it is vulnerable to a fall towards 35000.
DAX (16094.07, +10.96, +0.068%) continues to trade within the mentioned range of 15900-16100.The 15900 support level can produce a bounce towards 16400 eventually on a break above 16100.
Nikkei (29754.61, +144.64, +0.49%) has risen above the resistance at 29750 mentioned on friday.The index needs to sustain above 29750 to be bullish towards 30000 and 31000 eventually.
Shanghai (3528.88, −10.22, -0.29%) has come down today.The view remains bullish above 3500 to see a rise towards 3600.A strong break below 3500 can take the index down towards 3400/3350.
Nifty (18140.95, +38.20, +0.21%) rose above 18000 and managed to close above 18100.The index needs to sustain above 18100 to see a rise towards 18200/500 in the coming week. If 18100 fails to sustain then a dip towards 17800 is possible.
Sensex (60837.40, +150.71, +0.25%) closed above 60000 on Friday. While above 60000,the view remains bullish to see a test of 61000/62000 on the upside
COMMODITIES
Commodities look weak. Brent and WTI have come down since Friday. We need to watch if a break below $81 is seen today. Gold can consolidate between 1840-1880 for some time while below 1880.Silver has room to fall down towards 24.50.A strong break above 25 is needed to be bullish towards 25.5/26.Copper has come down slightly after testing resistance at 4.45.A dip towards 4.35/30 is possible now.
Brent(81.380) and WTI(81.17) has come down since Friday as OPEC+ flatly rejected calls by the Biden’s administration to open its taps more quickly and stuck to an agreed plan to raise output by 400K barrels per day after concluding its November ministerial meeting. The move irked the White House, as the underwhelming increase in production will not be enough to offset the current deficit and will ensure oil prices to stay supported in the coming months, exacerbating energy-linked inflation. Need to watch for a break below $81 this week. The contracts have strong resistance at $83 and $85.
Gold (1859.13) has dipped again after testing a high of 1871.4 on friday.A consolidation between 1840-1880 is possible for some time before we see an eventual break on either side.
Silver (24.998) has come down today. A sustained break above 25 is needed for the view to be bullish towards 25.5/26. While below 25 a dip towards 24.50/24 can be seen.
Copper (4.4255) has come down slightly after testing the resistance at 4.459.A dip towards 4.35/30 is possible now.
FOREX
Interesting juncture in the currency markets. The Dollar Index can take a pause while the Aussie, Yuan and the Rupee have at least a marginal possibility of further strength.
Although we have called for 96 on Dollar Index (95.01), there is near-term Resistance just above Friday’s high of 95.27. While that holds, a bit of a pullback towards 94.25 should not surprise. This is straight reflected in the Euro (1.1457) as well, which has Support just below Friday’s low of 1.1433. A small rally to 1.1500 should not be grudged it.
While Dollar-Yen (113.84) is bullish towards 115.50 overall, a near-term dip towards trend Support at 113.25 is a possibility to consider. The Dollar-Yuan (6.3820) trades near the lower end of the overall 6.3750-6.43 sideways range. It will be very interesting if it happens to break to the downside.
Corresponding to the Euro Support below 1.1433, the Pound (1.3431) has medium-term Support at 1.3300. Immediate Resistance seen at 1.3450. The Aussie (0.7337) has managed to avert a fall to 0.7250-40 and might even have good Support at 0.73 on the Weekly Candles. Looks more bullish than the Euro.
Dollar-Rupee trades near 74.35/40 (Offshore) after closing at 74.44 on Friday. We continue to be inclined towards bearishness while below Resistance at 74.60-80. The Euro-Rupee (85.21) has crucial Support at 85.00 now. It will have to be seen if it is allowed to break below that to target 84.
INTEREST RATES
The US Treasury yields continue to stay higher at the far-end while the near-end yields have dipped slightly. The far-end yields can move up in the coming days within their expected broad range. The corrective rise in the German yields seems to be losing steam. It will have to be seen if they move up to test their resistance or fall back from here itself. The 10Yr and 5Yr GoI looks mixed. They have room to move up further in the near-term before reversing lower again. It’s a wait and watch situation now.
The US 2Yr (0.50%) and 5Yr (1.21%) Treasury yields have dipped slightly while the 10Yr (1.56%) remains stable and the 30Yr (1.93%) has inched up slightly. We retain our view of seeing 1.65% on the 10Yr and 2%-2.1% on the 30Yr while they remain above 1.5% and 1.9% respectively. Overall, we expect the yields to remain in a broad range of 1.35%-1.65% (10Yr) and 1.75%-2.1%/2.2% (30Yr).
The German 2Yr (-0.76%), 5Yr (-0.58%), 10Yr (-0.26%) and 30Yr (0.05%) yields dipped across tenors. The yields seem to be lacking strength to extend the corrective rise towards -0.2%/-0.1% (10Yr) and 0.1% (30Yr). We will have to wait and watch if the yields are turning down from here itself to resume their broader downtrend.
The India 10Yr GoI (6.3681%) hovers below an immediate resistance at 6.38% which if broken can take the yield up to 6.4%-6.45%. While 6.38% holds, a dip to 6.35%-6.30% is possible. It’s a wait and watch situation. Broadly, as mentioned on Friday and as seen from the weekly candles, 6.3%-6.45% looks to be a possible broad range of trade for some time.
The 5Yr GoI (5.7168%) has chances of a rise to 5.75%-5.76% while it remains above 5.7% and then fall-back to 5.7% and 5.66% again.
