A COMMENTARY ON NIFTY, GLOBAL INDICES AND THE USD FOR 5TH NOVEMBER 2014.

DOW FUTURES CLOSED OUT THE DAY AT 17383 NOW TRADING AT 17356 IN THE FUTURES MARKET
FTSE FUTURES CLOSED OUT THE DAY AT 6453.80 NOW TRADING AT 6478 IN THE FUTURES MARKET
DAX FUTURES CLOSED OUT THE DAY AT 9168 NOW TRADING AT 9203 IN THE FUTURES MARKET
HANGSENG -123 OR 0.56% DOWN
NIKKEI 16846 DOWN 0.09%
SGX NIFTY 8385 UP 24 POINTS FROM INDIAN SESSION CLOSE
MOMENTUM IS THE NAME OF THE GAME. NIFTY AND DJIA – GLOBAL COUNTERPARTS IN THE RELENTLESS MARCH. EUROPE PLAYS BY THE RETRACEMENT RULES.

Another new all-time high on Monday with an indecisive daily candle. There were quite a few pointers for a wave end at the close on Monday and there is a case for that, but that’s unsupported so far by any negative divergence on the daily RSI 5 or MACD area, so it’s a definite maybe. If we don’t see a break under the 8166 area, I’m looking for “numeric harmony” targets in the 8367 or 8430 area to be hit before any big reversal.

A lot of bullish activity is being witnessed in Reliance, LT, Reliance Capital, Reliance Energy, IDFC, RPower, Exide, Karnatak Bank amongst the frontline stocks.

On Monday morning I had mentioned:

For wave theorists, Wave IV seems to have completed in the expected price zone of 8277, but was a bit short in terms of time. This does allow for the technical possibility that it was a smaller degree fourth wave than most of us were expecting, which means the rally has the option to make new highs, then terminate abruptly and unexpectedly, thus catching bulls and bears alike completely off-guard.
Now, going forward, the resistance comes at 8368. Above this expect nifty to hit 8430.

On the SPX, I had mentioned that 2028 is a very strong resistance and it has failed to negotiate that over the last four sessions (Tuesday close being 2012). The SPX hourly chart is open to the short side here. The low of Monday established a new support trend line that held by close Tuesday night. A strong push down today could trigger sell signals on these. Watch out for 1985 as the line in the sand for the current bull run.

Internationally, Dow closed out at 17383.84 which was 0.10% in the green. Now on a close above 17395 we are headed for 17653. On the S&P 500 the resistance is at 2028. Above this expect it to hit 2073 where the present move may terminate. But before that we have 2028 to negotiate.

Gold is flirting with danger at 1164. Below 1164 we can see a revisit to 1038 in the medium term. Current Price as at 0720 Hours IST is $1168

U.S. crude oil CLc1 fell 2.9 percent to $76.46 per barrel, dropping to its lowest level in about three years after Saudi Arabia cut sales prices to the United States. Crude is down more than 30 percent from a recent closing peak and down 7 percent over the past four sessions. Crude hit an international low of 75.88. Now trading at 77.37 as at 0720 Hours IST on 5th November.

The big news here though is on USD, where the falling wedge resistance trendline from the now 30 year old 1985 high has at last been broken. This opens up the possibility that we will see the move to 105 that I have been talking about for a year or two, though shorter term I’m expecting a high near here and then a big retracement. I have two possible trendline targets for USD here. The first would be rising wedge resistance in the 87.60 area, and that was almost reached on Monday. My preferred target though would be rising channel resistance in the 88.80 area, and we could see that tested this week. On that test I’d be looking for a reversal back into channel support, currently in the 80 area. The local currency now trades at 61.28 as at 0725 Hours in the offshore non-deliverable forwards market.

Going forward, the range for the day is 8273-8364 and the week is 8130-8515

Going forward the band of 8364-8430 are the resistances and 8277-8239-8160-8066-8033-7994-7920 are supports.

Have a wonderful trading week ahead.