STOCKS
Dow is getting support at lower levels and keeps our bullish view intact of seeing 29000-29500 on the upside. Nikkei and DAX trades stable within their near-term ranges. We expect them to break their respective range on the upside and move up in the near-term before a sharp correction begins. Shanghai looks mixed and can move on either side within its range. Sensex and Nifty could trade stable for a few days and then can resume their upmove eventually.
Dow (28430.05, −223.82, -0.78%) has bounced back well from the low of 28290 yesterday indicating good buying support at lower levels. This keeps our bullish view intact of seeing 29000-29500 on the upside from where we would be looking cautiously for a sharp corrective fall. 28300 (revised lower from 28350 mentioned yesterday)-28000 is a strong support zone.
DAX (12974.25, +28.87, +0.22%) is moving down in line with our expectation within the 13200-12800 range. While this range can remain intact for some time, the bias remains bullish. As such we can see the DAX breaking above 13200 and rise to 13800 in the coming weeks.
Nikkei (23215.25, +77.18, +0.33%) continues to trade stable between 23000 and 23500. Our view remains the same. 23000-23500 can be a possible range in the near-term before we see a break above 23500 and a rise to 23800-24000. We will be looking for a sharp corrective fall from around 24000 levels. A break below 23000 now will see a fall to 22500 and will keep the Nikkei in a broader range of 22500-23500.
Shanghai (3400.09, −10.52, -0.31%) is hovering around 3400. The immediate outlook is mixed with equal chances of moving either up to 3450 or fall to 3350-3300 from current levels. As mentioned yesterday, 3250-3450 can be a possible range for now in the near-term within its broad 3180-3470 sideways range.
Sensex (38900.80, +272.51, +0.71%) and Nifty (11470.25, +82.75, +0.73%) have managed to stay afloat after the sharp fall on Monday. As mentioned in the Evening Comments yesterday, Nifty can consolidate between 11300 and 11600 for sometime. Sensex on the other hand can trade in the range of 38500-39500. The broader view remains bullish. While above 11200, Nifty can target 11800-12000. Sensex can test 40500-41000 while it sustains above 38000.
COMMODITIES
Gold and Silver have dipped a bit but the pattern on the near term charts caution of a possible rise from here which could be sharp and bring prices back to recent highs or even higher. Crude remains stable for now within the longer term bullish picture. Copper has dipped a bit but has scope to rise back soon. Overall commodities see a short correction from higher levels seen yesterday but they could soon resume movement on the upside.
Brent (45.96) and WTI (43.12) have risen a bit but broadly continues to remain stable and steadily inching higher towards 47.50 and 45 respectively. Unless these levels break, we may not be able to see the expect pick up in momentum that could initiate a sharper movement in prices. For now, watch for a stable and steady movement around current levels.
Gold (1971.50) has dipped back from levels near 1990 seen yesterday. On the daily charts, Gold seems to be forming a bullish triangle pattern and would be validated on a confirmed rise above 2000 in the near term back towards 2100+. We are cautious of a sharp rise from current levels. A sustained break below 1940 would be needed to negate this bullish possibility.
Silver (28.36) has dipped slightly but the chart pattern on the near term charts look similar to Gold and has potential to move up sharply towards 30 in the near term. Watch price action near current levels for confirmation.
Copper (3.0180) dipped back from higher levels but overall has scope for a rise back towards 3.05+ in the near term. Our bullish view of rising towards 3.15/20 remains intact.
FOREX
Dollar Index has bounced back a bit leading to some corrective movement in other currencies. Euro may re-test supports before bouncing back from there while Aussie and Pound too are in a short term corrective phase. USDCNY has moved up slightly and we may expect USDINR also to move up today towards 73.10/15.
Dollar Index (92.39) has risen from support near 91.75 and could rise towards 93 initially before possibly facing rejection again towards 92-91 levels. Immediate view is bullish.
Euro (1.1904) tested 1.2011 yesterday before coming off from there. We may expect a dip to 1.18-1.1750 before another bounce is seen. While Dollar Index trades lower, Euro may see a corrective dip.
EURJPY (126.26) as dipped too but has limited scope on the downside upto 125.30. While the pair remains above 125.30, view is bullish for the longer term.
Dollar-Yen (106.05)$ has risen as the Dollar Index moved up. Overall trade in the broad 105-107 region remains intact for the near term.
Aussie (0.7349) dipped back below 0.74 but while above 0.72, we expect bullish in Aussie to continue. We may allow for a possible dip back towards 0.73 but overall remain bullish on the prices. A sustained break above 3.05 on Comex Copper (refer to commodities section above) could help Aussie rise above 0.74 and sustain higher levels.
Pound (1.3377) has dipped but has support near 1.3329 which if holds can bring about a bounce in the currency towards 1.35 or higher.
USDCNY (6.8302) has bounced a bit too but watch price action near 6.85 for a possible rejection from there.
USDINR (72.87) closed below 73 yesterday but may try and move back towards 73.10/15 before resuming its fall towards lower levels of 72.50-72.00 in the longer run. For today 72.75 may hold and push the exchange back towards 73.10/15.
INTEREST RATES
The US Treasury yields have declined further and slightly deeper at the far-end (10Yr and 30Yr). An immediate bounce from current levels will be needed to keep the bullish view intact of seeing higher levels. The German yields have also dipped but will have supports that can limit the downside. The broader view remains bullish. The 10Yr GoI has declined sharply and has negated our bullish view. The outlook is now bearish to see further fall in the coming days.
The US 2Yr (0.13%), 5Yr (0.26%) Treasury yields remain stable while the 10Yr (0.68%) and the 30Yr (1.44%) have dipped slightly deeper. The 10Yr will have to bounce from here in order to move up to 0.80% and 0.90% levels. A further fall from here can drag it to 0.60% again. The 30Yr has intermediate support at 1.40% while above which the outlook is bullish to see 1.65%-1.68% on the upside.
The German 2Yr (-0.69%), 5Yr (-0.66%), 10Yr (-0.42%) and the 30Yr (0.04%) Yields have dipped across tenors. The 10Yr will need a strong rise past -0.40% to gain momentum and move up to -0.30%. The 30Yr on the other hand has support at 0% and -0.05% which can limit the downside and keep the bullish view of seeing 0.25%-0.30% on the upside over the medium-term.
The 10Yr GOI (5.9051%) declined further breaking below 5.99% yesterday. This has negated our bullish view of seeing 6.30%-6.35%. An intermediate bounce from current levels to 5.95%-6% cannot be ruled out. However, while below 6%, the outlook is now bearish to see a revisit of 5.75% on the downside.
