Kshitij Consultancy Services
Morning Briefing Daily forecasts on global Stocks, Commodity, Forex and Interest Rates markets
15 Oct 18. 0848 IST or 0318 GMT or 2318 EST
GOOD MORNING!
STOCKS

Stocks are mixed. While there are support levels for some equity indices, shanghai and Dax looks weak in the near term. Nifty and Nikkei could bounce back from supports. Overall the indices are in a phase from where a positive up move can be seen soon.

Dow (25339.99, +1.15%) seems to be holding above the support near 25000 as seen in the 3-day candle charts. While the bounce sustains, there is some chances of seeing a rise back towards 26000 or higher in the near term. A break below 25000, if seen would make the index vulnerable to a further fall towards 23500. Preference is for the current bounce to sustain.

Dax (11523.81, -0.13%) came down to test 11514, breaking below the weekly candle support at 11600. It would be crucial to see if the index manages to bounce back above 11600 in the near term or continues its downtrend. Failure to bounce back immediately would take it lower towards 11200-11000 levels soon.

Nikkei (22387.52, -1.35%) has seen a bounce from support near 22000. This bounce will have to sustain to keep the index bullish for the near term targeting levels of 23000 and higher in the coming sessions. Unless the support breaks on the downside, preference is bullish for the near term.

Shanghai (2593.83, -0.51%) is stuck in the 2650-2530 region and could possibly see some range trade in this zone before rising back towards 2700 and higher in the medium term. Below 2530, crucial support is seen at 2450 which is likely to hold in the longer run.

Nifty (10472.50, +2.32%) bounced back well to close last week on a positive note. While the rise sustains, the wedge like formation on the daily chart may hold, indicating further bullishness in the near term. Immediate rise towards 10600 could be seen in the next couple of sessions.

COMMODITIES

Brent (81.33) has much room on the downside towards 78 when seen on the weekly candles. But while the immediate support near 79 holds, the price could test 84 on the upside before coming off from there.

WTI (72.10) has indeed sought support near 70.50 on the daily candles and has risen to trade higher just now. A rise towards 73-74 is possible in the near term. But on the weekly chart, there is still some scope of testing 68 on the downside which could be seen in the medium term.

Gold-WTI spread (17.01) has bounced back from levels near 16 and is currently testing channel resistance. If the resistance holds, the spread could come off towards 16 in the near term, else a break above 17, if seen and sustains, could trigger an upmove for the medium term.

Gold (1224.80, +0.23%) has immediate resistance at 1230 and while that holds, we could see some trade in the 1230-1210 region before the price attempts to move up beyond 1230.

Copper (2.8160, +0.55%) is gradually moving up to re-test 2.85-2.90. If the price manages to break on the upside, it could be bullish towards 3 in the near to medium term, indicating bullishness for the coming weeks. Some range trade is possible in the 2.75-2.90 region before a sharp upmove begins.

FOREX

Euro and Aussie could see some strength towards 1.161 and 0.72 in this week. Meanwhile, watch support near 73.35 on Dollar Rupee.

Euro (1.1550) could move back up towards 1.1614 (21 days MA) from current levels itself, or after a test of support near 1.152-1.150 in today’s session. The 21 days MA needs to be crossed for higher trendline resistance near 1.17 to be tested in the next 1-2 weeks.

Dollar Index (95.31) is midway between support near 94.75 and resistance near 96. It should come off towards the support in the next 1-2 sessions, either immediately or after testing 95.5-95.7 on the upside.

Dollar Yen (112.11) is coming close to crucial support levels – first an interim one near 111.75 and lower down near 111.25. Current preference is for the supports to hold in the near term.

Euro-Yen (129.49) could have some support near current levels and also slightly lower down near 129.36 (21 weeks MA). While above these levels, there are chances of a rise towards 131-132. However, a break below these could make it bearish towards 127 in the next 2-3 weeks.

Pound's (1.3111) could fall to support near 1.300-1.298 in the next couple of sessions. If this support also breaks, then it could become bearish towards lower support near 127.5 in the next 2-3 weeks. On the upside Pound faces two crucial resistances – the 89 weeks MA at 1.3202 and if that is breached, then the 55 weeks MA at 1.342 – it should stay below these levels in the next 1-2 months.

Aussie (0.7107) hasn’t been able to break below 0.7041. While above that, it could rise towards resistance near 0.72 in the next 1-2 weeks. A break above 0.72 and then above 0.732 (21 weeks MA) would be required to negate the possibility of a downside below 0.705 in the next 1-2 months.

Dollar Rupee (73.565): Market hugely Oversold in the near-term chart now, unlikely to break below 73.35 easily. Instead, more likely to see a rally to 74.00-25 over today-tomorrow. Can again start coming down from there, to move down towards 73.00 or lower in the medium term.

INTEREST RATES

India 10 year yield (7.98%) has could move down towards support near 7.90% in this week – below that, there is support near 7.8% which should hold in the next 1-2 months. Conversely, a break below that would be very bearish.

The US 10 Year (3.15%) : US 10 year could have support near 3.12%-3.13%. If it breaks below that, then we can look at lower levels. While above this support, it could retest resistance near 3.25%.

10 Year German-US spread (-2.65%) could again move up towards important resistance at -2.60% which should hold in the near term and take the spread lower towards -2.80%.

German 10 year yield (0.50%) could come off towards 0.45% in the near term while resistance near 0.57%-0.60% continues to hold.

DATA TODAY

5:30 11:00 IN Trade bal
...Kshitij Expn -13.44 $ Bln ...Previous -17.40 $ Bln

6:30 12:00 IN WPI
...Kshitij Expn 4.77 % ...Previous 4.53 %

12:30 18:00 US Retail Sales (MoM)
...Kshitij Expn 0.74 % ...Expected 0.70 % ...Previous 0.07 %




FRIDAY'S DATA:_
--------------

EU Ind Prodn (MoM)
...Kshitij Expn 0.65 % ...Expected 0.4 % ...Previous -0.7 % ...Actual 1.0 %

IN IIP
...Kshitij Expn 5.31 % ...Previous 6.53 % ...Actual 4.34 %

IN CPI
...Kshitij Expn 4.02 ...Previous 3.69 ...Actual 3.77




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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