Stocks
Dow (25080.50, -205.99, -0.81%) has continued to dip and has closed just above 25000 (the lower end of our 25250-000 Support region) after seeing an intra-day low of 24935.82. If there is no bounce today, then we have to be prepared to see a further decline towards 24500 as seen in the 3-day candle chart.
Dax (11412.53, -0.52%) failed to move back yesterday. While resistance near 11500 holds, the index could possibly come off towards 11100-11051 in the near term. A break above 11500 would be needed to negated the bearish view.
The Nikkei (21790.49, -0.26%) could trade in the 22500-21200 region in the medium term. The current rise could extend towards 22500 from where a decent rejection back towards 21200 could be possible. In the longer term charts, this could turn out to be a ranged trade.
Shanghai (2645.35, +0.50%) could remain above 2600 and attempt to test resistance at 2700. On the 3-day candle chart, the overall downtrend is intact and if 2700 holds, another dip towards 2500 could be possible in the coming week.
The Nifty (10570.80) has been unable to rise past Resistance at 10650 yesterday but remains potentially bullish for 10900-11000 while above 10500-400. Similarly, the Sensex (35116.24) remains potentially bullish while above 34750-600. Both could be in the process of developing a Bull Shoulder-Head-Shoulder.
COMMODITIES
Brent (65.88) and WTI (56.16) are stable after the recent sharp decline. We continue to see support at 64.50-65.0 on Brent from where a bounce is possible. Below 64.50, the fall could be limited to 62. On the other hand, WTI needs to bounce back immediately to avoid further fall towards 52. While above 65 and 56, there is some chances of bounce back. Else the bears could continue to play out in the next 1-2 weeks.
Gold (1210.50) has also moved up from support near 1200. While the upmove continues, it could target 1230 on the upside. View is bullish while above 1200.
Copper (2.7090) has bounced from support at 2.65 and is moving up slowly. A rise towards 2.75-2.80 looks likely.
FOREX
Watch resistances near 1.14, 1.3050 and 0.728 on Euro, Pound and Aussie. USDINR might hold above 72.
Dollar Index (96.93) could be mostly bearish towards 96.5-96.0 in the near term ie by next week. A break below 96 (if it happens) would be a bearish indicator for the medium term.
Euro (1.1326) : As per expectation, Euro is moving up towards 1.135. Infact, the upside in the current move could extend up till resistance near 1.138-1.140 (watch the 21 days MA @ 1.138); from where, Euro could again come off next week.
USD/JPY (113.54) could move lower towards support near 113 by next week – a break of 113 would be an important bearish indicator, possibly establishing 114.2-114.3 as a medium term top.
Aussie (0.7271) has immediate resistance close to 0.728-0.730 on weekly candles. Moreover, the crucial thing to see right now is whether it closes the week above the 21 weeks MA (0.7252) or not – a close above that would be bullish, leading to a rise to levels beyond 0.73 in the weeks ahead.
Pound (1.3004): As mentioned yesterday, Pound has been ranging between the broad 1.2700-1.3150 zone. It has resistance near 1.3050; which if broken could take it higher towards 1.3150; else a fall from 1.3050 could push back the pair towards 1.28-1.27 in the coming week. Important to see if closes above or below the 21 weeks MA @ 1.3009 in this week – a close above that would be bullish for the next couple of weeks.
EUR/JPY (128.62) looks likely to rise towards resistance near 129.50 in the near term. Given our preference on Euro and Dollar Yen, a dip from levels near 129.50 is likely, taking it back towards support near 127.
Dollar Rupee (72.31): Dollar Rupee is likely to hold above 72 and head back towards 72.60. Faint chances of immediately testing 71.80 is there but a confirmation below 72 is needed. For now, we may look for a rise back towards 72.60/70.
INTEREST RATES
US 10 Year yield (3.12%) has dipped lower in line with expectation and now has support in the 3.10%-3.05% zone. The US 30 year yield (3.36%) could also have Support near 3.30%. As mentioned yesterday, these supports are likely to hold on first testing and can produce a bounce that lasts up to the FOMC meeting in December, possibly along with a bounce in Brent towards 70 in the near term.
The German-US 10 Year yield spread (-2.72%) could rise towards medium term resistance near -2.65% to -2.60% in the next couple of weeks. A break above this resistance level might just establish the recent low near -2.80% as a possible bottom – hence levels near -2.65% to -2.60% need to be watched – a break above these levels might also indicate chances of bullishness in the German 10 year yield (0.40%) beyond medium term resistance near 0.50%-0.55%.
In India, the 10Yr GOI (7.73%) is seeing a break below 7.75%. As mentioned yesterday, the chances of moving lower towards 7.60% would now rise.
