STOCKS
Dow has risen back above 28000 and keeps alive the chances of seeing 28500-29000 first before the expected fall to 27000-26500 happens. DAX also sustains well above 12800 and could test 13000-13200. Nikkei has broken the 23000-23500 range on the upside and could head towards 23700-24000 now. Nifty can rise to 12000 while it sustains the break above 11700 seen yesterday. Sensex can test the 40000-40100 resistance zone which will have to be broken in order to move up further.
Dow (28303.46, +530.70, +1.91%) has risen back above 28000 again. It will have to be seen if it manages to sustain higher or not. While above 28000, the bias will be bullish to see a rise to 28500-29000 in the near-term. That in turn will then reduce/delay the danger of seeing an immediate fall to 27000-26500 that we have been mentioning for some time. We will have to wait and see.
DAX (12928.57, +22.55, +0.17%) continues to trade above 12800. We reiterate that while above 12800 and the near-term outlook is bullish to test 13000-13200 and then can reverse lower. A strong break/close below 12800 will be needed to bring back the danger of seeing a fall to 12000 into the picture.
Nikkei (23636.35, +213.53, +0.91%) has broken the 23000-23500 range on the upside and can test 23700. While this break sustains the chances are high for the Nikkei to rise towards 24000. However, 24000-24500 region is a strong long-term resistance that can cap the upside and trigger a fresh corrective fall.
Shanghai (3218.05) is closed today.
Nifty (11738.85, +76.45, +0.66%) has risen and closed above the key resistance level of 11700. While this break sustains, the outlook is bullish to see a further rise to 12000 in the coming days.
Sensex (39878.95, +304.38, -0.77%) has risen well beyond our mentioned level of 39800. Crucial resistance is there in the 40000-41000 region which can be tested today and will need a close watch. If Sensex manages to surpass 41000 decisively then the upside can extend upto 41000-41200 going forward.
COMMODITIES
Commodity prices trade higher today and could keep the upside momentum intact for this week. But we would wait to see if the prices show another leg of decline in the coming week as charts indicate bearishness for Gold and crude prices for the near term before a sharp rise could come in.
Brent (42.12) and Nymex WTI (40.01) have risen from levels seen yesterday despite of seeing a crude inventory build of 500,000 barrels for the week ended 2nd Oct. If Brent breaks above 42.50, it may rally towards 45-47.50 soon while initial support near 39.30 holds well. On the WTI, we need to see a break above 41 to keep the upside momentum intact. Watch price action to see if the rise today would sustain or dip back in the next few sessions.
Gold (1889.70) and Silver (23.90) have rise a bit but we would wait to see if the rise sustains or prices fall back in the next few sessions. As mentioned yesterday, we have scope for a fall towards 1860/40 on Gold while below 1920. For Silver we may expect some ranged trade within 23-25.
Copper (3.0220) has risen again above 3.0 and needs to sustain the rise in order to move up towards 3.10/15 or higher in the medium term.
FOREX
Dollar Index trades slightly lower today but other currencies show some hope of positive movement for the near term. Euro may rise towards 1.18-1.1815 from where a rejection is possible but the rise in Dollar Yen is contrary to the movement seen in Dollar Index and hence has pulled up EURJPY that indicates a possible rise to 126.80 while above 124.40. Watch price action near current levels. Dollar Yen needs to break above 106.11 to move higher towards 106.50-107. USDINR looks bearish on the charts but could take some time to dip as the central bank is preventing Rupee appreciating by buying Dollars at crucial lower levels.
Dollar Index (93.605) is trading slightly lower today. But we would wait to see if the index breaks above 94 again to move up towards 95 in the near term. Immediate view is bullish on the charts.
Euro (1.1770) needs to rise above 1.1815 and sustain higher in order to move up towards 1.1850-1.19 again in the medium term; else a dip towards 1.17 and eventually towards 1.16-1.15 cannot be negated.
EURJPY (124.75) is again showing signs of strength after breaking above 124.40. While the pair trades strong above 124.40, we may negate our expected fall towards 123-122 and instead look for a possible rise towards 126.80 on the upside in the next 1-2 weeks.
Dollar-Yen (105.99) tested immediate trend resistance of 106.11 on the daily candles yesterday and needs to break on the upside to extend the rise towards 106.50-107 in the medium term. Failure to rise above 106.11 could pull the pair down towards 105 again.
Aussie (0.7140) could re-test 0.72 on the upside. Range of 0.70-0.72 is likely to hold for some more time.
Pound (1.2929) looks likely to re-test 1.30 before coming off from there. Pound looks bullish while above 1.28.
USDINR (73.34) came off from 73.56 yesterday. On the charts important resistances are seen in the 73.50-73.80 region and while this holds, we may look for a gradual test of 73.00 on the downside. But RBI’s presence near 73.0-73.15 is concerning and could prevent a sharp fall in the pair. We may expect ranged trade within the broad 73.0-73.80 region for the medium term with 73.50-73.80 being crucial resistance zone.
INTEREST RATES
The US Treasury yields have risen back. The 10Yr and 30Yr yields have room to move up further in the near-term to test their crucial resistances. Thereafter the yields can reverse lower and keep the long-term downtrend intact. The German Yields can see a corrective rise in the near-term. The 10Yr GoI sustains above 6% and can move up to 6.08%-6.10% in the coming days.
The US 2Yr (0.15%), 5Yr (0.34%), 10Yr (0.78%) and the 30Yr (1.58%) have risen back again from levels seen on early Asian trades yesterday. The 30Yr is heading towards 1.60% as expected. If it manages to breach 1.60% the upside can extend to 1.72% and then a reversal can happen. The 10Yr has come up towards 0.80% in line with our expectation and has high chances to rise further towards 0.90% in the near-term. Thereafter a fresh fall can happen.
The German 2Yr (-0.70%), 5Yr (-0.70%), 10Yr (-0.50%) and the 30Yr (-0.07%) yields have been inching up over the couple of days. While the 30Yr sustains above -0.10%, a corrective bounce to 0% is possible in near-term. Similarly, if the 10Yr manages to break above -0.50%, a rise to -0.42%/-0.40% can be seen. This in turn will delay the fall to -0.60% (10Yr) and -0.20% (30Yr) that we have been expecting.
The 10Yr GOI (6.0141%) has dipped slightly yesterday but sustains above 6%. While above 6% we retain the near-term bullish view of seeing a rise to 6.08%-6.10%.
