STOCKS
Equity indices seem to be gaining strength slowly. The Dow has bounced back above 28000 and can move higher. DAX and Nikkei are moving higher and coming closer to their key near-term resistances which if broken will pave way for a fresh rise. Shanghai is holding above its crucial trend support and keeps the possibilities alive for a fresh rally. Sensex and Nifty has broken their sideways range on the upside and are bullish to see further rise.
Dow (28066.47, +190.85, +0.68%) has moved back above 28000 again and keeps our bullish view intact. While above 28000, a rise to 28250-28400 is possible. It will also keep the doors open to test 28800 on the upside in the coming weeks. 27600-27500 will continue to serve as a strong support.
DAX (13246.45, +82.57, +0.63%) has an important resistance at 13300. A strong break above this resistance is needed to gain momentum and see a fresh rise to 14000 and higher levels. While 13300 holds, the index may dip to 13200-13150 levels again. The bias is bullish and we expect DAX to break above 13300 eventually.
Nikkei (23422.92, +130.11, +0.56%) has moved further higher. As mentioned yesterday a strong break above 23500 will confirm the end of the corrective fall and will pave way for a test of 24000 and even 24800 on the upside in the coming weeks.
Shanghai (2903.15, -3.02, -0.10%) continues to sustain above the crucial 2890-2880 support zone. This keeps the possibilities high of the index breaking above 2920 decisively which will pave way for a rise to 3000 and higher levels.
Sensex (40889.23, +529.82, +1.31%) and Nifty (12073.75, +159.35, 1.34%) have broken their range on the upside above 40750 and 12050 respectively. While above 40750, the Sensex is bullish to test 41100-41200. Similarly, the Nifty can test 12150 in the near-term while it sustains above 12050.
COMMODITIES
Brent (63.65) made an intra-day high of 64.27 which is a crucial resistance on the 3-day and weekly candle chart and while the resistance holds, Brent prices could dip back towards 62. On the contrary, a break above 64.27 could turn bullish for Brent in the near term. We may allow a maximum upside of 65 within the current movement. A sharp rise on the upside would negate our current view of a fall towards 62.
Nymex WTI (58.00) has come off as resistance near 59.30 seems to be holding well for now. 56.50-60 could be the trade range for the near term with possibility of testing the lower end of the range first before moving higher.
Gold (1453.40) and Silver (16.82) are trading lower. Gold may fall towards 1440-1430 in the near term while Silver has scope to fall towards 16. Near term is bearish towards immediate support levels.
Copper (2.6450) has been rising sharply since the last 2-sessions and if the rising momentum continues to remain strong, Copper could head towards 2.70/7250 soon.
FOREX
Dollar Index (98.33) trades higher and could face important resistance at 98.50. A short dip is expected from there while long term view is bullish towards 99 or higher.
Euro (1.1008) is also trading near important support but a break below 1.0995 could drag Euro to lower levels of 1.09-1.08 in the coming weeks.
Dollar-Yen (108.97) has risen well from 108.30 and while that holds, Dollar-Yen has scope of rising towards 109.50 or even 110 on the upside. Near term looks bullish.
EUR-JPY (119.99) could trade within 122-119 region for the medium term.
Pound (1.2894) is trading sideways below 1.30 without any major movement. Probably the price may move up sharply after respecting the resistance near 1.30/31.
Aussie (0.6777) is trading lower and needs to fall sharply from current levels to turn bearish towards 0.6725/00. View is bearish below 0.6830.
USDCNY (7.0274) has come off slightly and is holding below 7.04/05. While the pair trades lower, we may see a test of 7.00-6.95 in the near term.
Dollar-Rupee (71.7350) is trading below resistance zone of 71.75-71.80 and could fall towards 71.50 on a break below 71.60. There is room for some rupee strength in the near term.
INTEREST RATES
The US Treasury yields continue to move down and are keeping our short-term bearish view intact. The German Yields are coming closer to their key support from where a bounce is possible. The 10Yr GoI has a very crucial near-term support which has to hold in order to avoid a further fall.
The US 2Yr (1.61%), 5Yr (1.62%), 10Yr (1.77%) and 30Yr (2.21%) have reversed lower again failing to hold on to Friday’s gains. As mentioned yesterday, the short-term outlook is negative. The 30Yr can fall to 2.15% and 2.12% in the coming weeks while it remains below 2.25% and then can bounce from there. The 10Yr on the other hand can fall to 1.70% and even 1.65% in the coming weeks.
The German 2Yr (-0.64%), 5Yr (-0.58%), 10Yr (-0.35%) and 30Yr (0.17%) have inched slightly higher across tenors. Though the broader view is positive, there is room to see a near-term dip before the uptrend resumes. The 30Yr can test 0.10% and 0.05% before reversing higher. The 10Yr can test -0.40% and -0.43% and then can resume its uptrend.
The Indian 10Yr (07.26 GS 2029) GOI (6.6204%) has dipped yesterday and has a crucial support at 6.60% now. Whether the yield manages to hold above this support or not will decide the next move. While 6.60% holds, a rise to 6.70% is possible. A break below 6.60% on the other hand can drag it to 6.55% and 6.50%.
The 10Yr (06.45 GS 2029) GoI (6.4722%) on the other hand has a crucial support in the 6.46%-6.45% region which can be tested in the near-term. A break below 6.45% will be bearish to see 6.4350% on the downside.
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