Kshitij Consultancy Services
Morning Briefing Daily forecasts on global Stocks, Commodity, Forex and Interest Rates markets
16 Feb 18. 0847 IST or 0317 GMT or 2217 EST
GOOD MORNING!
STOCKS

Overall major stock indices seem to be on the recovery mode after the initial weakness in the early sessions this month. We need to see if the recovery really wipes out further chances of a sharp decline or is the current recovery just a pause leading to more declines in the coming weeks.

Dow (25200.37, +1.23%) is moving up gradually. A break above 25500 can take it to previous highs of 26500+ levels again. Need to see if the index pauses or continues to move up.

Dax (12346.17, +0.06%) has important support near 12000 as seen on the 3-day charts. While that holds, trade within 12000-12650 is possible in the coming sessions. The index has risen a bit to current levels and may move higher to target 12600-12650 levels in the near term.

Nikkei (21694.96, +1.07%) is up about 200 points in line with our expectations of a rise towards 22200. Keeping our near term target intact, the index could find immediate resistance in the 22200-22400 region in the coming sessions. Near term looks bullish for Nikkei with some possibility of a fall thereafter.

Shanghai (3199.16, +0.45%) is on a week long holiday celebrating the New Year and the Spring Festival. It would open again next Thursday on the 22nd Feb. Till then we would be omitting our views on Shanghai. We would have to keep an eye at important near term resistance at 3260 which is likely to hold in the last few sessions of this month.

Nifty (10545.50, +0.42%) and Sensex (34297.47%) seem to be stuck in the 10680-10380 and 34750-33750 regions respectively. Note that the sideways consolidation is likely to continue with some possibility of seeing another small dip in the near term. Note that 10600-10680 levels on the Nifty and 34750 on the Sensex are important levels which if breaks on the upside could lead to further rise for the medium term. Unless a break of the mentioned levels on the upside is seen, we expect sideways range for the near term.

COMMODITIES

WTI (61.53) is likely to move up towards 63 in the coming sessions from where another dip towards 61 is possible. On the other hand, Brent (64.71) is likely to move up towards 65-66 in the next few sessions. Immediate view is for a slight upmove followed by a dip next week.

Gold (1359.30) is almost at 1360 and could test immediate resistance near 1365/70 as seen on the daily charts. If the price manages to break above 1365/70 just now, we could see the metal trading near 1380 in the next few sessions with greater possibility of rising further. Watch important resistance just above current levels.

Copper (3.2475) may pause near immediate resistance near 3.25. A break above 3.25, if seen could be bullish for the metal taking it higher towards 3.30 in the coming sessions.

FOREX

Dollar Index (88.405) is testing support on 3 day and weekly candles near 88.5 (also seen as support on daily line chart). There are some chances of a slight bounce from here towards 89-90; however we should keep in mind that the recent downmove of the Dollar Index has broken crucial long term support on weekly line chart near 89, which might indicate onset of prolonged bearishness and consequently, a probable break of above mentioned support near 88.5.

Strong rise in Euro (1.2533) seen yesterday is continuing today and as projected yesterday, it is now very near to the previous high of 1.2537 (25-Jan) which could be the next Resistance level to look at. We repeat: if this also breaks, then we would look at 1.2600 and 1.2670. However there are some chances of a dip from 1.2537.

The Dollar-Yen (106.11) is testing immediate Support near 106.00 on the daily candles and if Euro goes beyond 1.2537, Dollar-Yen could simultaneously try testing lower support at 105.50 on the weekly candles.

The Euro-Yen (132.94) is again seen to be bouncing from crucial support near 132 on the 3 day candles. This is an important support level and we could see a break of it if the Yen goes below 105.5 while the Euro respects its resistance near 1.2537.

Pound (1.4121) has resistance on 3 day candles and 3 day line chart near 1.42-1.43 which should lead to a dip in the coming week. If it breaches that level, there is higher resistance 1.44 on the weekly candles.

Dollar-Rupee (63.915) Need to see if Dollar-Rupee rises past 64.00 or not. Else we might see dip to 63.65. Be careful about Nifty while below 10600-10650.

INTEREST RATES

US 10 Year Yield (2.90), US 30 year Yield (3.15), US 5 year yield (2.65), US 2 year yield (2.19) : After the yield upmove seen yesterday on back of higher inflation data release in the US, the far end yields have again consolidated around their respective long term resistances. The 10 Year however did see highs near 2.94. The fact that it has again come down towards 2.9 suggests that there might be a bigger shock required to push it towards 3%.
We repeat that the long term resistance levels for the 4 yields are as follows: 2.85-2.90, 3.20, 2.7 and 2.2 respectively) which we have been expecting to hold in this month.

Japan 10 year yield (0.062) had broken support on short term chart 3 days back and hasn’t moved up yet, reflecting that it might now stay below 0.07 and test 0.05 in the coming weeks.

DATA TODAY

13:30 19:00 US Housing Starts
...Kshitij Expn 1260 K ...Expected 1230 K ...Previous 1192 K


DATA YESTERDAY:-
-------------
Australia Labour Force
...Kshitij Expn 19.3 K ...Expected 15.2 K ...Previous 31.40 K ...Actual 16.00 K

IN WPI
...Kshitij Expn 3.47 % ...Previous 3.58 % ...Actual 2.84 %

EU Trade Bal
...Expected 22.40 EUR Bln ...Previous 22.00 EUR Bln ...Actual 23.8 EUR Bln

IN Trade bal
...Kshitij Expn -12.96 $ Bln ...Previous -14.88 $ Bln ...Actual -16.30 $ Bln

US PPI ex Food & Energy (MoM)
...Kshitij Expn 0.4 % ...Expected 0.2 % ...Previous -0.1 % ...Actual 0.4 %

US PPI
...Kshitij Expn 0.3 % ...Expected 0.4 % ...Previous -0.1 % ...Actual 0.4 %

US Philifed Index
...Kshitij Expn 41.6 % ...Expected 21.5 % ...Previous 22.2 % ...Actual 25.8 %

US Industrial Production
...Expected 0.20 % ...Previous 0.37 % ...Actual -0.09 %

US Capacity Utilization
...Expected 78.1 % ...Previous 77.7 % ...Actual 77.5 %

US TICS (Net foreign purch of long-term Sec)
...Kshitij Expn 30.5 $ Bln ...Expected 50.3 $ Bln ...Previous 57.5 $ Bln ...Actual 27.3 $ Bln

DISCLAIMER
These views/ forecasts/ suggestions, though proferred with the best of intentions, are based on our reading of the market at the time of writing. They are subject to change without notice.Though the information sources are believed to be reliable, the information is not guaranteed for accuracy. Those acting in the market on the basis of these are themselves responsible for any profits or losses that might occur, without recourse to us. 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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