STOCKS
Dow (24873.66, +0.47%) is trading in the narrow range of 25500-24500 and could move on either side early next week. While below 25500, there is scope of testing 24000 on the downside. A break above 25500 if seen could initiate a rise towards 26500 in the medium term. Need to see how long the index manages to stay below 25500.
Dax (12345.56, +0.88%) moved up slightly but continues to trade below immediate resistance near 12500. While that holds, near term looks bearish towards 12100.
Nikkei (21750.59, -0.24%) could trade in the 22600-21400 region in the next few sessions. While above 21400, near to medium term looks bullish.
Shanghai (3292.21, +0.03%) is stuck in the 3350-3250 region and is likely to continue so today also. A gradual decline towards 3250-3200 is possible in the medium term.
Nifty (10360.15, -0.49%) trades above support near 10200 on the 3-day charts. Some ranged movement in the 10500-10200 region is possible next week too. Sensex (33685.54, -0.44%) is below 34000 and could see some dip towards 33500-33250 in the near term.
COMMODITIES
Brent (65.06) is again likely to test resistance at 66. Watch price action there. If 66 holds, another dip towards 64.50 is possible else if the price manages to break above 66 next week, we could see a rise towards 67.50 in the near term.
Nymex WTI (61.23) is also heading towards resistance at 62. Price is likely to remain stuck in the 62-60 region in the coming sessions.
Gold (1316.20) has broken below immediate resistance near 1320 and this could be an indication of an upcoming decline towards 1300. Need to be careful at current levels.
Copper (3.1180) has fallen sharply and could come down to test 3.0750 before bouncing up towards 3.15 again next week.
FOREX
Dollar index (90.105),against our expectation has bounced again from support levels near 89.5-89.75 on daily candles. The support had been broken yesterday, leading us to predict that a further downmove towards crucial support near 89.2 on weekly line chart would happen. However the support has held and now, there is immediate resistance visible near 90.25 on daily candles which might produce a dip.
Euro (1.2306) – is again testing support near 1.23 on weekly candles which has held on the past few occasions. It could further dip towards 1.225, seen as support on daily candles, post which a bounce back to higher levels can be expected.
Dollar Yen (105.98) continues its down move towards crucial support near 105 on daily candles. A break of the same would confirm medium term bearishness for Dollar Yen.
Euro Yen (130.42) is dropping towards support near 130-129.75 on 3 day candles as expected. If the Dollar Yen goes below 105, we might see Euro Yen break 130 for lower levels.
Pound (1.3926) as per our expectation had dipped from resistance near 1.4 on the daily candles and is now moving towards support near 1.39 on 3 day candles.
Dollar Rupee (64.935) to continue range trade between 64.75-65.15 today also. Next week could see some movement as volatility may rise.
INTEREST RATES
US 10 Yr Yield (2.82), 30 Yr (3.05), 5 Yr (2.62), 2 Yr (2.28) : The US 2 Year Yield has risen to a 9 year high near 2.28% as data on unemployment claims and import prices indicated higher employment and rising prices respectively. The longer term yields continue to consolidate near levels seen in the last 2-3 sessions.
After CPI and Retail Sales data disappointed those expecting rate hikes, data on unemployment claims and import prices have again raised sentiment for 4 rate hikes this year. As mentioned yesterday, the data releases on housing starts, industrial production and capacity utilization (due later today) could prove to be extremely important in building further sentiment.
A week of volatility in yields is expected next week.
(Long term resistance levels for the 4 yields have been as follows: 2.85-2.90, 3.20, 2.7 and 2.2 respectively – these could be breached in end-March if the rate hike takes place. Let’s wait and watch.)
