Tuesday, November 15, 2011
Italian Debt Still Troubling Market
U.S. Dollar Trading (USD) sentiment reversed again last night with Italian bond yields once again heading towards 7% and negative headlines out of Europe prompting risk off trade. Also dampening sentiment is a growing trade spat between the US and China as the two superpowers clash over the strength of the Chinese Yuan. In US stocks, DJIA +259 points closing at 12153, S&P +24 points closing at 1263 and NASDAQ +53 points closing at 2678. Looking ahead, October Retail Sales forecast at 0.3% vs. 1.1% previously.
The Euro (EUR) The came under heavy selling pressure after opening on a strong footing after news on the weekend of a new Italian Government. When yields did not fall at the start of Europe the market sold the Euro aggressively and a solution to the crisis does not seem clear. Support was found under 1.3600 but sentiment is negative. Looking ahead, Q3 GDP forecast at 0.2% vs. 0.2%..
Oil & Gold (XAU) Gold failed to test $1800 instead fell back on USD strength finding support at $1775. Oil was similar to Gold failing to test its key level instead falling back on rising risk aversion in global markets.
RUPEE Bull Flag Pattern Breakout 3 months view
Rupee: Support 47.40 – 49 – 50 Pivot 50.60 Resistance 51.60 – 52.20 – 53.80
Rupee: A Flag (Bullish) follows a steep or nearly vertical rise in price, and consists of two parallel trend lines that form a rectangular flag shape. The Flag can be horizontal (as though the wind is blowing it), however it often has a slight downtrend. The vertical uptrend, that precedes a Flag, may occur because of buyers' reactions to a favorable company earnings announcement, or a new product launch. The sharp price increase is sometimes referred to as the "flagpole" or "mast". Flags are very similar to Pennants. However, with a Flag, the price trend lines tend to run parallel, whereas with a Pennant, the price trend lines tend to converge. A bullish signal occurs when the price rebounds beyond the upper trend line of the Flag formation, and continues the original upward price movement. This is considered a pattern confirmation.
Looking at the chart of Rupee has started its rally from 44.80Per$ and after testing the higher level of 50.5 per$ it has been in the consolidation phase where on lower side it was taking support at 48.98 and 48.86 per$ just below 49 per$ and reversal in prices were seen from lower level. On higher side it was facing resistance at 50.5 per$ to 50.6 per$ and selling was seen from higher level. Recently it’s showing sign of give positive Breakout above 50.65 per$ indicating breakout of the Bull Flag pattern. Pole of the Flag started from 44.8 per$ to 50.5 per$ where the difference comes to 5.7 where if we look at breakout above 50.65 per$ expected target comes to 56.35 per$ in medium term. On the way up we might look at some resistance at level of 52 per$ and above 52 small resistance can also bee seen at 53.5 per$ and 55 per$ where some intervention can be expected from RBI side which might halt the Rupee for short term.
RAJEEV DARJI
9820987859
Daily Nifty & Rupee Outlook for 15th Nov 2011
Nifty: Nifty yesterday which opened gap up above 100 DMA at 5237 and after opening correction started where it traded below 5200 and tested the lower level of 5146 and closing was also seen at days low? Today as the Asian market is trading flat and negative where Nifty is expected to take support at falling trend line of 5125 level. Short bounce can be expected which can be used as a selling opportunity where near term resistance is seen at 5215 level and till the time this resistance hold selling is advise around 5160 – 5180 level. in the last trading session after the gap down opening. On lower side if sustain trading is seen below 5120 will bring to 5070 to 5000 level in near term. Immediate resistance is seen at 5200 and its expected to hold the resistance level and we maintain bearish view where 5000 is the next target and below 5000 can also test 4700 level in medium term. Stochastic which were in down trend just below 20% zone has given negative intersection and if the resistance is holding may again turn negative.
USD/INR: Rupee in the previous session which open at 50.10 per$ hold lower level support of 50 per$ and sharp reversal in price were seen and traded above 50.25 and tested days high of 50.57 per$ and closing was also seen near the higher level at 50.48 per$. Today’s after gap up opening near 50.54 per$ slight if sustain trading above 50.6 per$ is seen will give a fresh breakout in market where uptrend will continue and will move to test 50.9 per$ immediately. Rupee will give a Bull Flag Pattern Breakout if todays closing is seen above 50.65 per$ where in near term 52 per$ to 55 per$ will be the target. Dollar index is trading just above 77.5 level at 77.58 and is taking support at 77 and if some reversal in price is expected where on higher side 77.8 and 78.4 can be retested. Rupee is expected to trade in range of 50.55 per$ to 50.95per$ for the day with buying at dips advise. Stochastic are trading just below overbought zone with positive intersection where some rise in price is expected.
Friday, November 11, 2011
Copper outlook for Short term 11th Nov 2011
Copper: Support 6350 – 6950 – 7250 Pivot 7560 Resistance 7850 – 8150 – 8750
Copper: The head-and-shoulders pattern is one of the most popular and reliable chart patterns in technical analysis. And as one might imagine from the name, the pattern looks like a head with two shoulders. Head and shoulders is a reversal pattern that, when formed, signals the security is likely to move against the previous trend. There are two versions of the head-and-shoulders pattern. The head-and-shoulders top is a signal that a security's price is set to fall, once the pattern is complete, and is usually formed at the peak of an upward trend. The second version, the head-and-shoulders bottom (also known as inverse head and shoulders), signals that a security's price is set to rise and usually forms during a downward trend.
Looking at the chart of Copper it has started its rally from 2800 and after testing the higher level of 7950 short correction was seen forming the left shoulder and tested the support of 6000 level. There after the rise which was seen crossed the higher level of 7950 and move further upside where 10150 were tested. There after reversal for the higher level again it has taken support at 6610 level and formed a neck line where shot bounce which was expected has been seen and tested the higher level of 8150 level. Further we are looking the formation of the Right Shoulder where short term top is expected to be posted and will move to test the Neck Line which comes at 6650 level and once this support of 6650 and sustain trading below 6600 will confirm the down trend where its next down side target will be the previous bottom of 2800 around. If we look at the Fibonacci Expansion of point a-b from point c which comes to 5400 which is 100% and 4850 comes to 121% level will be the immediate target where it may get halt for some time before the next round of selling which may be seen after short bounce. We are on the over view where the lower side bottom may be seen at 4850 level and after testing the same further trend will be clear rather it will move to test 2800 or price may revert from the lower level of 5400 or 4850 level around.
Prepared By: Rajeev R. Darji
Sr. Research Specialist
XTB India
Wednesday, November 9, 2011
EURUSD outlook for Short term 9th Nov 2011
EURO: Support 1.3200 – 1.3450 – 1.3550 Pivot 1.3700 Resistance 1.3800 – 1.3950 – 1.4200
EURO: A Pennant (Bearish) is considered a bearish signal, indicating that the current downtrend may continue. A Pennant (Bearish) follows a steep or nearly vertical fall in price, and consists of two converging trend lines that form a narrow, tapering flag shape. The Pennant shape generally appears as a horizontal shape, rather than one with a downtrend or uptrend. Apart from its shape, the Pennant is similar in all respects to the Flag. The Pennant is also similar to the Symmetrical Triangle or Wedge continuation patterns however; the Pennant is typically shorter in duration and flies horizontally.
Looking at the chart Euro after the fall from the higher level of 1.4250 has tested the level of 1.3600 and after the fall has been in the consolidation phase and was showing higher bottom formation and was facing good resistance at 1.3850 level where selling was seen at higher level. Closing basis was not above to holding the level above 1.3800 and selling pressure was seen at higher level. . On lower side support was seen at 1.3700 which was the rising trend ling and today it has convincingly broken the same and is expect to move further down side. The highest of the Pole is 650 pips and crossover below 1.3700 brings the lower target of 1.3200 to 1.3100 levels. This is near the previous bottom what we have seen around September 2011