STOCKS
Equities seem to be losing momentum and are in need of some fresh trigger to move further higher from here sharply. In the absence of any fresh triggers, the price action in the coming days will need a close watch to see if any sign of reversal is emerging. Dow hovers around 31500 and has equal chances to either rise to 32000 or fall to 31000 from here. DAX looks vulnerable to fall from here itself while it stays below 14000. Nikkei and Shanghai are signaling a turn-around and can fall in the coming days. Sensex and Nifty can test their crucial supports now and will need a close watch to see if they can sustain above those supports or not.
Dow (31493.34, −119.68, -0.38%) seems to be struggling to sustain above 31500. The near-term outlook is mixed. There are equal chances to see 31000 on the downside and 32000 on the upside from here. However, we reiterate that from a bigger picture, 32000 is a crucial resistance that can cap the upside and trigger a corrective fall to 30000 or even lower in the coming weeks.
DAX (13886.93, −22.34, -0.16%) remains lower. Our view remains the same. A fall to 13600 and 13400-13200 looks possible from here itself while the DAX remains below 14000. Also while below 14000, the chances of seeing an extended rise to 14500-14600 stands reduced.
Nikkei (29947.42, −288.67, -0.95%) has fallen sharply today and has broken the crucial level of 30000. While this break sustains a corrective fall to 29000-28000 is possible in the coming days. It will also negate the chances of seeing 33000-34000 on the upside immediately.
Shanghai (3657.33, −18.03, -0.49%) has come down today. The 3730-3750 resistance region mentioned yesterday has held very well. A further fall to 3600-3550 can be seen in the near-term while it remains below 3700.
Sensex (51324.69, −379.14, -0.73%) has declined further and is heading towards 51000 as expected. The price action at 51000 will need a close watch as a break below it can trigger a sharp fall to 49500-49000 and even 48000 going forward.
Nifty (15118.95, −89.95, -0.59%) had broken below 15200 as expected and can now test 15000 in the coming sessions. If it manages to sustain above 15000, a consolidation between 15000 and 15400 is possible in the near-term. But, a break below 15000 will be bearish to see a further fall to 14800-14600 in the near-term. The price action at 15000 will need a close watch.
COMMODITIES
Gold continues its plunge and may test support near 1740 on the downside before a possible bounce back is seen in the medium term. Silver ahs also been dragged lower but while above 26, bullish possibilities remain intact. Crude prices have dipped slightly from immediate resistance levels and could trade weak for afew sessions more before bouncing back from there. Copper has surged well on high demand for the metal. We may expect a further rise towards 4.00 before a dip from there sets in.
The rally in crude pries gained momentum yesterday after the American Petroleum Institute (API) estimated a draw in the US weekly inventory for week ended 12th Feb, 2021. The API had estimated a draw of 5.8mln barrel . Brent (62.46) tested immediate resistance near 65 and has fallen from there to trade lower today. It has dragged down WTI (58.92) as well to levels below 60. We may expect a short corrective phase now towards 60-58 on Brent and 55 on WTI.
Gold (1765.20) has been falling in line with our expectation and could test 1760-1740 initially. There is scope for a test of 1720-1700 too but we would wait to see price action near 1740 to confirm on any further bearishness. A bounce from 1740 looks likely for the very near term.
Silver (26.73) has declined too from levels above 27. There js a possibility to test support near 26 before bouncing back from there again.
Copper (3.9090) has risen sharply testing our target of 3.90 finally. The rise has been boosted by strong demand. Watch for a possible fall from 4.0. Else the rally may continue higher taking the price towards 4.6.
FOREX
Dollar Index remains stable keeping Euro also stable above 1.20. Aussie and Pound looks fairly bullish towards 0.78+ and 1.41 respectively. EURJPY may re-test 128 on the upside while USDCNY could trade in the broad range of 6.44-6.50. USDINR is closed today for Shivaji Jayanti. We would watch price action near support at 72.50 on Monday.
Dollar Index (90.629) now could trade the 90-91 range for some sessions before a sustained break is seen on either side. Immediate view is ranged for now.
Euro (1.2084) has support at 1.20 and while that holds, we may expect trade within 1.20-1.21-1.22 in the near term.
EURJPY (127.68) has risen well from immediate support at 127 and while that holds, a re-test of 128 or higher looks possible.
Dollar-Yen (105.66) has fallen well from 106.225 seen a couple of days ago. While below 106.225, we expect a further dip towards 105.30-105.00.
Aussie (0.7765) has risen slightly but has scope for a rise towards 0.78 again while above 0.7680 which is an immediate support. With a sharp rise in Copper prices (refer commodities section above), we may expect Aussie also to move up slowly.
Pound (1.39570) is holding below 1.40 just now but we may expect a rise to 1.41 soon. View is bullish after a short corrective dip.
USDCNY (6.4698) has dipped from 6.4869, indicating a range of 6.44-6.50 for the near term. Only a break on either side would then indicate further movement from here.
USDINR (72.6550) tested lower levels of 72.50 on the NDF yesterday after the OTC markets closed. We would keep a close eye at support near 72.50 which if holds could produce a bounce back towards 72.60/75. Failure to bounce from 72.50 would open up chances of a fall towards 72.15. Today the Indian currency markets are closed for Shivaji Jayanti. The expected movement can be seen on Monday.
INTEREST RATES
The US Treasury yields hover near their crucial resistances. We would continue to watch the price action closely to see if the yields reverse lower from current levels and keep the long-term downtrend intact or will it breach the resistances and rise further to negate our view. The Treasury Secretary Janet Yellen had proposed for more quantum of stimulus. The development on this front will need a close watch as they can support the yields to remain higher. German yields have risen back and keep our bullish view intact. They can rise in the near-term to test their key resistances and then can reverse lower. The 10Yr GoI has surged yesterday and is bullish to rise further.
The US 2Yr (0.10%), 5Yr (0.55%), 10Yr (1.29%) and 30Yr (2.07%)are hovering at crucial resistances. A strong rise past 1.30% on the 10Yr and 2.10% on the 30Yr will be bullish and will open doors for a further rise to 1.45%-1.55% (10Yr) and 2.20%-2.40% (30Yr) over the medium-term. It will also negate our bearish view of seeing a reversal and the resumption of the long-term downtrend. The 10Yr may have to fall below 1.20% now to negate the above mentioned rise and to keep the long-term downtrend intact.
The German 2Yr (-0.70%), 5Yr (-0.63%), 10Yr (-0.35%) and 30Yr (0.15%) have risen back yesterday after having dipped slightly on Wednesday. The near-term bullish view of seeing -0.30%/-0.25% (10Yr) and 0.20% (30Yr) remains intact. As we have been mentioning for some time, the level of 0.20% is a crucial resistance on the 30Yr from where we expect the yield to reverse lower.
The10Yr GoI (6.1792%, 05.77 GS 2030) had surged yesterday and can head towards 6.20% in line with our expectation. The price action around 6.20% will need a close watch to see if the yield is reversing from there or will extend the rise break above it.
The 10Yr GoI (6.1318%, 05.85 GS 2030) has risen well beyond our expected level of 6.10% much quicker than expected. There is room on the upside to test 6.18% in the near-term.
