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India Pre Market News : 16 Jan 2020

January 16
18:33 2020

STOCKS

The Dow is trying to break its 29000-29050 resistance zone which we expect to hold and trigger a corrective fall. DAX is managing to hold above 13400 and keeping the chances alive of seeing a rise again. Nikkei seems to lack strong sellers to fall sharply. This keeps the bullish view intact of breaking above 24000. Shanghai can dip in the near-term and can consolidate sideways for some time. Sensex and Nifty are likely to test their crucial resistances which are likely to cap the upside and produce a corrective fall.

Dow (29030.22, +90.55, +0.31%) surged to a high of 29127.59 and has come-off from there. We reiterate that 29000-29050 is a strong resistance which is likely to hold and trigger a corrective fall to 28500 or even lower. A strong close above 29100 will only negate the above mentioned bearish view. We will have to wait and watch the price action in the coming days.

DAX (13432.30, -24.19, -0.18%) is managing to hold above 13400 and is keeping alive the chances of seeing a rise to 13500. A strong break above 13500 will ease the downside pressure and will clear the way for 13600.

Nikkei (23950.90, +34.32, +0.14%) remains below 24000 but seems to lack strong sellers to drag it sharply lower. This keeps the broader bullish view intact of seeing 25000 on the upside. A strong break/close above 24000 will aid to gain momentum.

Shanghai (3081.19, -8.84, -0.29%) remains below 3100 and can dip to 3060-3050 in the near-term. As mentioned yesterday, the index can oscillate between its support at 3035 and resistance at 3125 for some time. Within this our bias is bullish to see an upside break above 3125 eventually.

Nifty (12343.30, -19, -0.15%) fell but has bounced from the low of 12278.75. While above 12300, a test of 12380 is possible from where we expect the Nifty to reverse lower towards 12200-12100. As mentioned yesterday, incase if the Nifty breaks above 12380 (less preferred) decisively, we may have to allow for a further rise to 12550 before seeing a correction.

Sensex (41872.73, -79.90, -0.19%) can test 42200 while it sustains above 41800. A pull-back from 42200 can drag the index to 41800 or even lower. But incase if the Sensex breaks above 42200, a rise to 42400 is possible before it reverses lower.

COMMODITIES

Commodities hold above immediate supports and could rise in the near term.

Brent (64.43) bounced slightly before testing 64 on the downside. While above 64, there is scope of seeing a rise towards 66 in the near term.

Nymex WTI (58.24) has bounced back instead of moving lower below 58. While 58 holds in the near term, we may expect a bounce back towards 60. Overall WTI is likely to remain bullish while above 58.

Gold (1556.90) is holding above 1540. Above 1540 there could be some sideways ranged movement in the 1540-1580 region while lower supports near 1520-1500 is expected to test soon on a break below 1540.

Silver (17.99) has immediate support near 17.75-17.60 region and while that holds, we may expect a bounce back towards 18.50.

Copper (2.8640) has moved up slightly. Trade in the 2.90-2.75/80 region is likely to be seen in the near term.

FOREX

With weak Dollar, most currencies have strengthened or remain stable with a possible sideways consolidation in the near term. Euro, Dollar-Yen, EURJPY, Pound all look bullish while some sideways consolidation may be expected in the Aussie, Yuan and Rupee.

Dollar Index (97.22) is trading lower and finds difficulty to move above 97.60/70 just now. The index has fallen towards 97.24 ass mentioned yesterday and has further scope of falling towards 97.10-97.00 in the near term before bouncing back from there.

Euro (1.1151) has moved up as Dollar Index trades lower. A further dip is expected in the near term targeting 1.11 on the downside before it attempts to move higher again.

Dollar-Yen (109.93) has scope to re-test levels above 110, targeting 110.50-111 before seeing a sharp rejection from there. While above 109.72, bullishness could remain intact.

EURJPY (122.95) has moved up to test immediate resistance near 123. On the longer term charts there is scope for a rise towards 124 on the upside if 123 breaks and sustains just now. Watch price action near 123 which is likely to hold in the first testing.

Pound (1.3043) is likely to head towards 1.32 in the near term. While support near 1.30 holds, Pound is bullish in the near term.

Aussie (0.6906) is stuck in a sideways range within 0.69215- 0.6875 and may continue to remain so for the next 1-2 sessions. Immediate resistance is seen near 0.6925-0.6950 on the upside which may hold in the near term eventually pushing prices to levels below 0.6875.

USDCNY (6.8865) could spend some time in a sideways range above 6.85 and upside could be capped near 6.92 just now. We may expect an eventual rise in USDCNY in the medium to long term. For now ranged sideways movement is expected.

Dollar-Rupee (70.81) did not break above 71 yesterday but came off from 71 to close at lower levels. While 71 holds, we may expect some sideways movement in the near term with downside limited to 70.60.

INTEREST RATES

The US Treasury yields have dipped further and are poised at their key support levels which will need a close watch. Inability to bounce from current levels can drag them further lower and will negate the chances of seeing a rise again. The German Yields have come down but have key supports that can limit the downside and keep the broader uptrend intact. The 10Yr GoI has come-off from its key resistance and can dip further in the near-term. The yield can consolidate sideways for some time.

The US 2Yr (1.56%), 5Yr (1.60%), 10Yr (1.79%) and 30Yr (2.25%) Treasury yields have dipped further. The 30Yr and the 10Yr are at their key support levels of 2.25% and 1.79% respectively. Inability to bounce from current levels can drag them further lower and negate the chances of a rise that we have been looking for. A break below 2.25% can take the 30Yr lower to 2.15% while the 10Yr can test 1.73%-1.70% on a break below 1.79%.

The German 2Yr (-0.60%) yield remains stable while the 5Yr (-0.51%), 10Yr (-0.20%) and 30Yr (0.30%) have dipped slightly. . The broader bullish view is intact. The 10Yr has support at -0.25% and the 30Yr has at 0.25% which can limit the downside. We expect the German yields to sustain higher move up to 0.40%-0.45% (30Yr) and -0.10% (10Yr) in the coming weeks.

The 10Yr GoI (6.6274%) has declined sharply. The resistance at 6.70% is holding well. A test of 6.60% looks possible in the near-term and the yield can consolidate sideways between 6.60% and 6.70% for some time.

DATA TODAY

13:30 19:00 US Retail Sales (MoM)
Expn 0.5 % …Expected 0.3 % …Previous 0.3 %

13:30 19:00 US Philifed Index
…Expected 4.5 …Previous 0.3

21:00 2:30 US TICS (Net foreign purch of long-term Sec)
…Previous 32.5 $ Bln

DATA YESTERDAY:-
————–
UK CPI Y/Y
Expn 1.5 % …Expected 1.5 % …Previous 1.5 % …Actual 1.3 %

EU Ind Prodn (MoM)
Expn -0.5 % …Expected 0.3 % …Previous -0.9% …Actual 0.2 %

EU Trade Bal
…Expected 22.3 EUR Bln …Previous 24.0 EUR Bln …Actual 19.2 EUR Bln

IN Trade bal
Expn -10.24 $ Bln …Previous -12.13 $ Bln …Expected -11.80 $ Bln …Actual -11.25 $ Bln

US PPI ex Food & Energy (MoM)
Expn 0.2 % …Expected 0.2 % …Previous -0.2 % …Actual 0.1 %

US PPI
Expn 0.1 % …Expected 0.2 % …Previous 0.0 % …Actual 0.1 %

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