Market Morning Briefing: Aussie Continues To Remain Stable While Below 0.70

STOCKS

Equities continue to look mixed. Dow and Nikkei can trade in a narrow range for some time while keeping the possibilities alive of seeing one more leg of rise before a sharp correction is seen. DAX remains bullish and can move up in the coming days. Sensex and Nifty have closed on a strong note on Friday and will have room to rise further this week. Shanghai has bounced-back from its key support in line with our expectation and can move up further.

The Dow (26671.95, −62.76, -0.23%) remains stable below 27000 and could consolidate in a narrow range of 26000-27000 in the near-term. We expect the upside to be capped at 27500-28000 on a break above 28000 and will be looking for a corrective fall. Whether this corrective fall happens from below 27000 itself or after a rise to 27500-28000 is not clear at the moment.

The DAX (12919.61, +44.64, +0.35%) sustains well above 12800 and keeps our bullish view intact of testing 13200 on the upside. From a bigger picture DAX has potential to target 13500 and 13800 over the medium-term.

Nikkei (22616.23, −80.19, -0.35%) has dipped to test 22500 as expected. We expect it to sustain above 22500 and remain in a narrow range of 22500-23000 for sometime. A strong rise past 23000 is needed to boost the momentum and take the index higher to 24000. In case of a break below 22500, the downside can extend up to 22000. We will have to wait and watch.

Shanghai (3282.68, +68.55, +2.13%) has bounced-back well. 3200 is holding well in line with our expectation. While this bounce sustains, a further rise to 3350 can be seen this week. As mentioned on Friday, Shanghai can now run into a broad sideways consolidation between 3200 and 3450 for a few weeks now.

As expected Nifty (10901.70, +161.75, +1.51%) broke above 10830 and has closed on a strong note on Friday. The outlook is bullish to test 11000 and 11250 in the coming days. Strong support is now in the 10700-10600 region.

Sensex (37020.14, +548.46, +1.50%) has closed just above 37000. While it manages to sustain this break above 37000 a further rise to 38000 can be seen this week.

COMMODITIES

Commodities are mixed just now with possible upside in Gold and Silver towards 1820 and 20 but may be short lived as Silver may face rejection from crucial resistance at 20 which could also pull down Gold in the medium term. Copper looks bullish for the near term while Crude prices could see a corrective fall in the near term.

Brent (42.87) and WTI (40.51) may see some corrective movement while below 45 and 41 respectively in the coming sessions. Overall narrow trade could be seen within 45-42 (Brent) and 41-38 (WTI) respectively in the near term.

Gold (1809) and Silver (19.70) are back to higher levels and could be bullish towards 1820 and 20 respectively. Silver may remain within 19-20 region for some more time…