STOCKS
Global indices are broadly positive and are likely to move higher in the near term. The pace of upmove could be slow though. Dow has risen above a key resistance. Shanghai is gaining strength and seems to be gearing up for a fresh leg of upmove. Nikkei and DAX has supports which can limit the downside and retain the uptrend. Indian indices on the other hand looks vulnerable for an intermediate corrective fall before moving further higher.
Dow (25,914.10, +65.23, +0.25%) has risen above the 21-day moving average (21,823). A rise to 26,100-26,200 is possible as long as it sustains above the 21-day moving average which will now act as a good support. The index will come under pressure only if it declines decisively below 21,740.
The upmove in DAX (11,657.0, -28.63, -0.25%) paused yesterday. However, with support at 11,600, the outlook remains positive for a test of 11,780 and 11,840.
Nikkei (21,528.38, -56.12, -0.26%) has a support at 21,440 (21-day moving average) which can limit the downside in the near term. While above this support, the outlook is bullish for Nikkei to test 21,900-22,000 in the coming days.
Shanghai (3,088.43, -7.98, +0.26%) has risen sharply yesterday and is trading at the key resistance level of 3,100. A strong break above 3,100 will pave way for the next targets of 3,150 and 3,180. But a pull-back from 3,100 can keep the index in the 2,950-3,100 range for some more time.
Sensex (38,095.07, +70.75, +0.19%) and Nifty 50 (11,462.20, +35.35, +0.31%) moved further higher yesterday, but has closed on a mixed note. This keeps open the possibility of seeing an intermediate corrective fall before resuming the uptrend. Nifty can fall to 11,300 or 11,200 while below 11,500. Sensex can test 37,900 and 37,600 while below 38,400
COMMODITIES
Oil seems to be gaining strength and keeps the possibility high to rise further in the near term. Gold, Silver and Copper could consolidate sideways for a few sessions, may be until the outcome of the US Fed meet on Wednesday.
Gold (1,305) is managing to sustain above 1,300 but is not gaining momentum. As mentioned yesterday, a range bound move between 1,290 and 1,310 can be seen for some time. A breakout on either side of 1,290 or 1,310 will then determine the next move. Silver (15.36) on the other hand can trade between 15.10 and 15.50 in the near term.
Copper (2.91) continues to consolidate between 2.89 and 2.95 and has equal chances of rising to 2.95 or dipping to 2.89-2.88 from current levels.
The dip to 57-56.85 mentioned yesterday did not happen in WTI (59.13). Instead, it has held very well above 58 and seems to be gaining strength slowly. WTI is likely to test 60.7 on a strong break above 59.5
Brent (67.6) is inching higher towards the upper end of its 66-68 range. The bias continues to remain positive for Brent to break 68 and rise to 70.
FOREX
Overall currencies are mixed. While Dollar-Index has near term support and could bounce back, the other major pairs have been trading in narrow and small range. Some volatility could come in by next week.
Dollar-Index (96.44) has dipped slightly and may test support at 96.25 over today or tomorrow followed by a bounce towards 97 in the near term. Failure to bounce from 96.25, could indicate bearishness towards 96.00-95.75 levels.
Euro (1.1341) saw a decent rise yesterday and is currently trading higher. A test of 1.14 is likely on the upside before falling back towards 1.13-1.1250 again.
Euro-Yen (126.11) has dipped a bit and while resistance near 126.80 holds, Euro-Yen could fall towards 125.20 in the near term.
Dollar Yen (111.15) has fallen a bit. There is 21-D Ma support near 110.90 which could produce a bounce back to 112.50. Sustained break below 110.90, if seen would be bearish for the medium term, opening up lower targets of 110.
Aussie (0.7102) has resistance above current levels and could have limited upside just now with a possible fall towards 0.7050-0.700 in the near term.
Pound (1.3275) is stuck in the 1.34-1.34 region and could spend some time within this zone. 1.34 is an important resistance just now and could hold for the medium term, pushing the currency towards 1.31.
USDCNY (6.7152) is trading near important level just now. If support at 6.72 holds, the pair could be pushed higher towards 6.72/74 else a fall below 6.70, if seen and sustains could be bearish towards 6.65. While a bounce from 6.70 looks more likely, we cannot negate a fall just now.
Dollar-Rupee (68.5275) may head towards 68.20/00 this week. At the same time we need to be cautious of a possible corrective upmove from current levels back towards 68.75/80.
INTEREST RATES
The US yields are stable. The 2YR (2.45%), 5Yr (2.41%), 10Yr (2.60%) and the 30YR (3.01%) are trading near levels seen yesterday. As mentioned yesterday, we may look for a further rise in the yields towards 2.67% (10Yr), 3.10% (30Yr) and 2.5% (5Yr).
The 10YR GOI (7.4802%) has bounced from support at 7.45%. If the rise sustains, the yield could eventually move up towards 7.55% else a fall towards 7.35% is possible.
The German yields could test resistance levels and may fall in the near term. The 10YR (0.09%) could fall towards 0.04%.
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