STOCKS
Most indices are likely to be on a recovery mode and could be trading higher in the next couple of sessions.
Dow (24264.30, +0.96%) saw huge intra-day volatility yesterday. It first fell to a low of 23523.16, but recovered steadily to close higher for the day. This has been the fourth test of Support at 23500 since February. The long lower wicks on the 3-day and Weekly Candles suggest strong buying interest near 23500. So far, our near-term range of 23500-24500 has held well. Now we have to see whether the Dow manages to break/ rise past 24500. The outlook will become very bullish if it so manages.
Dax (11957.90, -0.37%) is currently holding above the weekly horizontal support near 11800-11700 levels while there is scope to test 11600 on the 3day candles in the medium term. After bouncing back sharply from 11800 yesterday, Dax may move up towards 12200-12300 in the next few sessions.
Nikkei (21668.34, +1.64%) has been moving down slowly and steadily as visible on the 3-day chart. While immediate weekly resistance near 21500 holds, Nikkei looks bearish for the coming sessions. A fall towards 20500-20000 is possible by next week.
Shanghai (3131.11, -0.18%) could spend another week in the 3100-3200 region as both are immediate support and resistance levels as send on the weekly candles. Thereafter, if support at 3100 manages to hold strong, a bounce back towards 3300-3350 is possible, triggering a medium term upmove. Else a fall below 3100, if seen could be vulnerable for a sharp fall in the longer run.
Although Nifty (10128.40, -1.14%) fell from 10279.85 yesterday to close lower at 10128.40, it trades higher at 10277 on the SGX today morning, suggesting a possible recovery of all of yesterday’s losses. It has been stuck in the 10000-10300 region for the past 4-5 weeks and a break on either side is possible within the next week to decide further directional movement for the near to medium term.
COMMODITIES
Brent (68.33) and Nymex WTI (63.67) bounced sharply from 3-day support levels near 67 and 62 respectively. While these levels hold, the crude prices could move up in the coming sessions. Near to medium term looks bullish while immediate supports hold.
Gold (1333.90) could trade in the broad 1360-1300 region for the coming sessions. A rejection from 1356 seen on Tuesday could take it lower towards 1320 before another attempt to test 1360. Longer term charts look bearish towards 1300. A rise above 1360 is difficult for Gold in the near term.
Copper (3.0260) faced a sharp rejection from 3.0750. While that holds, a re-test of 3.00 is possible. Near to medium term trade could be seen in the 3.0750-2.9500 region.
FOREX
Dollar index (90.16) has stayed above the earlier resistance line (near 90.10) in the downward channel (daily candles) and is looking likely to move towards higher resistance (seen on daily line chart, weekly line chart and 3 day candles) near 90.5-91.0 (earlier mentioned as 91). The test of 90.5-91.0 could possibly happen next week.
Euro (1.2279) again saw a low near 1.225 (1.2257) yesterday and is currently trading near 1.228. There is strong support seen at 1.225 on 3 day candles, weekly candles and daily line chart. However, on the daily candles, there still seems to be some scope for a downmove towards lower support near 1.2225. In either case, the Euro could bounce from 1.2250-1.2225 towards 1.24 again. A break of 1.2250-1.2225 would however lead to medium term bearishness.
Dollar Yen (106.97) as we predicted yesterday again moved up to test resistance near 106.9 in the downward channel on daily candles but is now looking like it might also breach this resistance. On 3 day candles, weekly candles and daily line chart, it has already breached immediate resistances. Could this be an indicator that Dollar Yen would be bullish in the medium term? We would have to wait and watch.
Euro Yen (131.35) didn’t dip from immediate resistance on daily candles at 131 but is now testing slightly higher resistance near 131.5 (on daily candles) and should see a dip from here. However, if the Yen continues to weaken against the Dollar beyond 107, we could see this resistance being breached as well.
Pound (1.4077) is moving up from support near 1.4010 on interim trendline on daily candles. It could either move up further towards resistance near 1.42 on 3 day candles or drop to crucial support near 1.395 (seen on daily and 3 day candles). Let’s wait and watch.
Dollar Rupee (65.15) – Dollar Rupee is likely to trade sideways in the 64.80-65.30 region. Rupee is likely to weaken against Yen and Euro in the coming sessions.
INTEREST RATES
US long term yields as we predicted yesterday have bounced from supports on short term charts towards channel resistances. However, US yields seem to be moving in a downward channel which might imply that a slow and gradual decline could take place through Apr-May.
US 10 Yr Yield (2.81%), 30 Yr (3.04%), 5 Yr (2.63%), 2 Yr (2.30%) :
The 10 Year yield rose from support near 2.75% on the short term chart and could now move up further towards 2.85%-2.86%, which could be a resistance level in the downward channel on short term charts.
The 30 yr yield as per expectation rose to resistance in downward channel on short term chart near 3.04% and could now dip from here back towards 3%.
