STOCKS
Yesterday we said, “maybe growth concerns will trigger profit-taking in the medium term.” But, profit-taking came in yesterday itself, instead of a little later in time.
Dow Jones (24404, -301.87, -1.22%) has seen a decent dip and could be breaking the uptrend since 21712.53 (Dec). 25000 now gets established as a strong medium-term Resistance. Be ready for dip towards 23000 at least, possibly even 22500 over the next few weeks.
As mentioned earlier, DAX (11090, -46.09, -0.41%) has good Resistance at 11300 and might turn down towards 10600 anytime now.
Given that profit-taking is setting in already, upside in Nikkei (20631) might be limited to 21000 instead of the 21300 we mentioned yesterday.
Shanghai (2586, +0.31%) is up today after dip to 2573 yesterday. Still see important Resistance in the 2600-60 region and favour a profit-taking dip from anywhere between current level and 2660.
Although the Sensex (36444.64, -134.32, -0.37%) and Nifty (10922.75, -39.10, -0.36%) appear a little more resilient than the other Indices, it might be incorrect to expect them to be bullish while the others fall for the next few weeks. It might be prudent to budget for a corrective dip towards 34000 and 10500 on the Sensex and Nifty respectively in the medium term.
COMMODITIES
Brent (61.49) and WTI (52.99) have dipped as expected. Resistances on the longer term line charts seemed to have held and could push prices towards 60-58 (on Brent) and 50 (on WTI) respectively.
Gold (1284.10) and Silver (15.38) have tried to move up a bit but while Gold and Silver trade below 1290 and 16, view is bearish for the near term.
Copper (2.6680) looks bearish while below 2.70 and could target 2.60 in the coming sessions.
FOREX
Dollar Index (96.33) and Euro (1.1363) are trading stable just now. As mentioned yesterday, Euro is trading above immediate support at 1.1350 and while that holds, the currency could bounce back towards 1.14-1.15 levels. Unless a clear break below 1.1350 is seen, we may not consider bearishness for the coming sessions just now. Correspondingly, a dip in the dollar Index is expected towards 95.50-94.50.
Dollar Yen (109.66) saw a slight dip but while above 108, the pair looks bearish towards 111 in the near term. Overall medium term bullishness is intact.
Pound (1.2958) has risen and could re-test 1.30 before coming off from there. While 1.30 holds, a fall to 1.2750 can be expected; else Pound could test upside resistance near 1.31 as seen on the 3-day line charts.
Aussie (0.7133) has been coming off from 0.7235 and looks bearish towards 0.7050, if an immediate bounce from here is not seen. A fall to 0.705 is possible followed by a rise back to current levels.
USD-CNY (6.7973) has dipped slightly within the medium term upmove. The current dip could be restricted to 6.78 while the pair may move up again towards 7.83. View is bullish.
Dollar Rupee (71.4450) rose yesterday to close above 71.40. While the pair trades higher, a test of 71.60 is possible on the upside. We continue to watch price action near 71.40/60 levels. A break above 71.60 would take it higher towards 71.85
INTEREST RATES
Slight dip in US Yields yesterday, being attributed to slowdown fears. The US 5Yr (2.58%), 10Yr (2.75%) and 30Yr (3.07%) have all dipped 2bps compared to no movement in the 2Yr (2.59%). We have to see whether the US 5Yr can see a deeper fall towards 2.45% which is a strong, long-term Support coming up from near 0.90% in 2016.
Bank of Japan meeting today. Japanese Yields (2Yr -0.18%, 5Yr -0.18%, 10Yr -0.01%, 20Yr +0.44% and 30Yr +0.65%) are again heading lower. A rise in yields looks unlikely anytime soon.
In Germany also, all the Yields (5Yr -0.36%, 10Yr 0.23% and 30Yr 0.83%) expect for the 2Yr (-0.60%) could also dip a bit.
In India too, the 10Yr GOI (7.5327%) dipped a bit more yesterday. As such, we may consider 7.59-7.65%-7.70% to be a decent Resistance for now.
