Vikram Murarka
Kshitij Consultancy Services
GOOD MORNING!
STOCKS
On Friday we said, "Equities might not lose serious money, but it might not be easy to trade/ make money in it for a while either." In line with that, we saw disappointment for Bulls on the Dow (17568.53, -0.92%) and Dax (11347.45, -1.43%) on Friday. Even the Nikkei (2039.41, -0.73%) and Shanghai(4038, -0.80%) are trading in the red today.
The Dow closed below 17600, but it may remain weak/ ranged while below 18000 and could test 17250 in the near future. Even on the Dax, the support at 11400 has been broken and a test of 11200 is thus possible. But with this, the chances of a Bull Flag have become a little weaker.
Ongoing Rounding Top in the Nikkei can pull it down to 20000. The Shanghai could be beginning to lose steam, as feared. The 4200-4300 region may provide good Resistance now. Look for a dip towards 3900.
There's danger that the Nifty (8521.55, -0.79%) could start entertaining overvaluation fears, especially in case immediate Support at 8500 breaks today. Bulls need to be cautious.
COMMODITIES
Gold (1097.62) bounced back from 1076 levels and may see a short upward correction towards 1100-1125. But while below 1100, we cannot rule out a re-test of 1076 or lower.
Silver (14.65) has bounced from 14.37 on Friday but does not look strong enough to rise from current levels. Near term may see a fall to support near 14.40-14.25 and while that holds some consolidation is possible. See 2nd chart: http://www.kshitij.com/graphgallery/silvercandle.shtml#candle
Copper (2.3825) has risen slightly from support near 2.35 as expected but while below resistance near 2.45-2.40 the view remains bearish. See the last chart on the following page:
http://www.kshitij.com/graphgallery/copperma.shtml#ma
Brent (54.52) and WTI (47.96) have broken our mentioned levels of 55 and 48 respectively and is headed sharply down. May see further fall in the coming sessions.
FOREX
Euro (1.099) has risen from levels of 1.0920 but as said earlier we need a clear break above 1.10-1.11 to get clarity of any upcoming bullishness. We may expect a rise in the coming sessions.
Dollar-Yen (123.54) has dipped after coming off from 124.5 last week. The 21-day MA is acting as an immediate support near 123.21 which if holds may push it up towards 124 again. A break below 123.20 if seen may take it lower to 123.0-122.90 before again rising up. See charts:http://www.kshitij.com/graphgallery/jpycandle.shtml#candle
Aussie (0.7297) has fallen below 0.73 and has a fair chance f moving towards long term weekly support near 0.72 in the near term from where a short bounce is possible. Near term view remains bearish. See chart:
http://www.kshitij.com/graphgallery/audcandle.shtml#candle
Pound (1.5521) is testing support near current levels on the daily charts and while that holds we may see a bounce towards 1.56-1.57 over the coming sessions. See chart:http://www.kshitij.com/graphgallery/gbpma.shtml#ma
Dollar-Rupee (64.04) rose sharply last week to close above 64.0 (faster than we had expected) and while above 63.80 we may see a rise to 63.20/30 in the near term.
INTEREST RATES
Overall yields are almost stable. The FOMC meeting is due on Wednesday.
The German-US 10Yr (-1.56%) moved up slightly from -1.58%. As mentioned last week,movement is likely to remain choppy in the near term with no clarity on further direction. See chart:http://www.kshitij.com/graphgallery/eurusddiff.shtml#eurusd
The UK and the Japanese yields are trading slightly low and look bearish in the near term. See chart:http://www.kshitij.com/graphgallery/gbpsin00.shtml#sin00
Japan 30Yr (1.40%) has sharply risen from 1.35% and may move higher in the near term.See charts:http://www.kshitij.com/graphgallery/jpysin00.shtml#sin00
The Indian 10Yr GOI (7.83%) also closed higher last week from levels of 7.80%. May see a rise to 7.85% in the very near term.
DATA TODAY
9:00 GMT or 14:30 IST GER IFO Business Climate
...Expected 107.6 ...Previous 107.4
9:00 GMT or 14:30 IST GER IFO Business Situations
...Previous 113.1
9:00 GMT or 14:30 IST GER IFO Business Expectations
...Previous 102.0
12:30 GMT or 18:00 IST US Durable Goods Orders
...Expected 3.20 % ...Previous -1.77 %
FRIDAY'S DATA:-
----------------------
CN Manuf PMI (Jul)
...Expected 49.7 % ...Previous 49.4 % ...Actual 48.2 %
US New Home Sales
...Expected 543 K ...Previous 517 K ...Actual 482 K
The above views are based on the latest available information. Though the information sources are believed to be reliable, the information is not guaranteed for accuracy. While the views are proffered with the best of intentions, neither the author, nor the firm are liable for any losses that may occur as a result of any action based on the above. World financial markets, and especially the Foreign Exchange markets, are inherently risky and it is assumed that those who trade these markets are fully aware of the risk of real loss involved.
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