STOCKS
Major indices continue to remain bullish. Dow, Nikkei, DAX and Shanghai look strong to move further higher in the coming days. Senex and Nifty looks mixed after the fall yesterday and could fall if they fail to see a bounce-back today.
Dow (28235.89, +100.51, +0.36%) is holding above 28000 as expected and is managing to move higher. As mentioned yesterday, the Dow can test 28400-28430 initially from where a near-term corrective dip is possible. However, an eventual break above 28430-28450 will then pave way for the next target of 28800 – a crucial resistance to watch on the upside.
DAX (13407.66, +124.94, +0.94%) has moved up and is heading towards 13500 in line with our expectation. The level of 13500 is a key resistance which will need a close watch. A strong break above this hurdle is needed to move further higher. While 13500 holds, a corrective dip to 13300 is possible. We will have to wait and watch.
Nikkei (24019.13, +66.78, +0.28%) is managing to hold above 24000 and is keeping our bullish view intact to test 24500. As we have been mentioning for some time, the upmove can extend even up to 24800 and 25000 in the coming weeks. In case of a break below 24000, a corrective dip to 23800 is possible before reversing higher again.
Shanghai (2988.20, +3.81, +0.13%) has risen past 2980 and is keeping our bullish view intact. As we have been mentioning for some time the current leg of upmove can target 3000 and 3050 in the coming weeks. An intermediate dip from 3000 to 2970 or even lower cannot be ruled out before we see a rise to 3050.
The resistance at 41200 on the Sensex (40938.72, -70.99, -0.17%) mentioned yesterday seems to be holding well. Inability to bounce above 41000 again can drag the index lower to 40750 and even 40500 in the coming days.
Nifty (12053.95, -32.75, -0.27%) has failed to sustain higher and can test 12000 while it remains below 12100. It will have to be seen if the Nifty manages to bounce from 12000 or not which will indicate whether the index is falling back to 11900-11800 or moving higher to 12200 and 12300-12350 levels. We will have to wait and watch.
COMMODITIES
Crude oil prices have risen on fresh positions created in the spot market yesterday. Gold and Silver rise towards resistances and could face rejection in the next 1-2 sessions while Copper is falling from 2.85 but could rise back towards 2.85 again in the medium term.
Brent (65.32) and Nymex WTI (60.08) are both trading higher today below near term resistances at 66 and 61 respectively. We may see a test of the upper resistances in the next few sessions before the prices decline from there.
Gold (1479.30) has immediate resistance near 1490/95 which if holds could push down prices towards 1460 in the near term. Overall sideways trade in the 1490-1460 region is likely to continue for some more time before a dip below 1460 is seen. Overall medium term trend looks bearish after the current sideways consolidation.
Silver (17.09) is trading below resistance at 17.25 which could be tested over the next 1-2 session from where a dip looks likely towards 16.50-16.25 levels.
Copper (2.8065) has declined from levels near 2.85 which could be a decent resistance just now. After a brief period of trade below 2.85, we may expect a rally towards 2.95-3.00 in the medium term.
FOREX
Dollar Index (97.13) had been in the 98.50-97.25 region since last week of Oct’19 and has now broken below 97.25 which is now an important resistance for the near term. While below 97.25, there is scope for the index to fall back towards 96.75-96.50. Only a decisive break above 97.25 would bring back hopes of seeing a further rise from current levels.
Euro (1.1141) is holding below 1.12 just now but it is important to see how long it can sustain trade within 1.12-1.11 region. A break below 97 on the dollar Index could trigger a sharp rise in the Euro above 1.12.
Dollar-Yen (109.53) has resistance near 109.78 (revised down from 110 mentioned yesterday) which if holds could possibly keep the currency pair sideways in the 108.50-109.60 region for the near term. We would watch if USDJPY breaks below 109.50 today or bounces back to re-attempt a rise towards 109.78.
EUR-JPY (122.04) has immediate resistance near 122.78 which if holds could push the currency pair down to 121.50 in the near term. Above 122.78, resistance is visible near 123.
Pound (1.3282) has come off sharply. 1.3530 is likely to hold for the near term while Pound could test 1.32 on the downside before bouncing back from there. Any interim bounce from current levels could be limited to 1.3340 on the upside.
Aussie (0.6867) is trading above immediate support at 0.6850. While that holds, we may expect ranged trade in the 0.6850-0.6950 region in the coming sessions. Only if 0.6850 breaks, we would look for a dip towards 0.68 in the medium term.
USDCNY (6.9997) has bounced from 6.9598 and could test 7.0182 on the upside. Gradual rise towards 7.05 could be on the cards for the near term.
Dollar-Rupee (71.00) closed higher yesterday. A test of 71.09/10 looks possible from where it could dip back towards 71.00-70.90. Watch price action near 71.09/10; a break above would be bullish towards 71.25 (would wait to see if 71.10 breaks today)
INTEREST RATES
The US Treasury yields have moved up again. Though there is room on the upside, key resistances coming up are likely to cap the upside. The German yields remain bullish and can move up, in a slow pace though, in the coming weeks. The resistance on the 10Yr GoI is holding well and the yield can see downticks in the coming days.
The US 2Yr (1.63%), 5Yr (1.70%), 10Yr (1.87%) and 30Yr (2.29%) Treasury yields have risen-back across tenors. However, the 10Yr has an immediate resistance at 1.90% and then at 1.95%. The 10Yr is likely to reverse lower after testing them. Similarly, the 30Yr has strong resistance in the 2.30%-2.35% region from where it can reverse lower again.
The German 2Yr (-0.64%) yield has dipped while the 5Yr (-0.54%) and 10Yr (-0.28%) remained stable. The 30Yr (0.24%) on the other hand continues to move higher and has risen past 0.22%. While above the 0.20%-0.22% support zone, the 30Yr is bullish to test 0.40% in the coming weeks. The 10Yr can move up, in a slow pace though, towards -0.20% and even -0.10%.
The 10Yr GoI (6.7788%) remained below 6.80% yesterday and has closed lower. While below 6.80%, the near-term outlook is negative to see 6.75% and 6.70%. The price action around 6.70% will need a close watch to see if the fall can extend beyond 6.70% upto 6.65%.
