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Market Bites: DEC Week 3

Stimulus Hope Boosting Assets Probably $900 Billion

• The dollar weakness and dovish expectations for the FOMC meeting have buoyed gold prices and all other
asset classes across the globe. The Federal Reserve was due to provide a playbook for its economic policy
with policymakers set to conclude the final meeting of the year with investors expecting near zero interest
rates and more bond-buying.

• Stimulus is still the main driver in the market right now until they get something done, and it does appear
there is some motivation on that front to get something done. Congressional leaders on Wednesday closed in
on a $900 stimulus package that would include direct payments to individuals.

• The latest round of U.S. fiscal stimulus talks comes as Covid-19 cases increase at a record pace. The U.S. is
recording at least 215,729 additional Covid-19 cases each day, based on a seven-day average calculated by
CNBC using Johns Hopkins University data. This resurgence in Covid-19 cases has led to states reimposing
stricter social-distancing measures that are slowing down parts of the economy, especially the labour market.

• Data showed jobless claims totalled 885,000 last week, hitting their highest level since early September.
Economists expected 808,000 workers sought state jobless benefits during the week ended Dec. 12.

• On Wednesday, the Federal Reserve pledged to keep buying bonds until the economic recovery was
completed. Fed Chairman Jerome Powell also said the central bank would increase its bond purchases if the
recovery slows down. So basically things go right we have FED things go wrong we will have more FED.

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Market Technical:

Dollar Index Downside Continuation

• After technical confirmation in the last week of November, its now continuing its journey

• 89.40/88.25 is the support (prior support given to 90.20), where 88.25 is the last significant swing low

• Some bounce can be expected from the index but a daily close with follow through action below 88.25 will mark
the new Bear phase for the index

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Gold: Turnaround

• 200EMA of 47,895 provided the support for gold in this last fall. Previously from this 200EMA level
market used to catch its original bullish trend.

• So now the recent low which is at 47,550, can work as pivot point for the market along with
47,895

• Gold topple the previous swing high of 50,175 which is positive after market bounced from
200EMA. 48,600 swing low will be now good near-term support
,

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Silver:

• 56,400 is now the support as 200 daily EMA is at that level which is still intact by the market

• Tringle Breakout is clear which happened in international spot silver on last Thursday
• Initial target for this pattern breakout is 79,000 which is the previous high and then towards 86,000

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S&P : Flag in the play

• Market is trading comfortable near all time high

• Flag pattern is holding great

• If the Flag Pattern holds then next target for the index will be around 3900

• 3622 is strong interim support

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USD/INR: Ready for a move?

• Above weekly chart is showing a 7 weeks long consolidation for INR. And that’s too above long-
term trend line support.
• But for the first time it closes below the trend line which is negative for the market and indicating probability of
INR strength
• In coming week, if we have follow through action below 73.40, then this bearish move can take the pair near 200
MA support of 70.40 level.

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Nifty50: Breakout

• Last week also the rally was unabated

• No Trend Reversal sign in the weekly chart of the index

• If there is any deep correction then it should hold the support of 12,400 level

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Particulars 18.12.20 11.12.20 %Chnage Anticipation Expectation

Hopefully its now evident that last
1,878.80 1839.6 2.13% fall in the price will be the pivot
for the market
Gold

50,305 49,290 2.06%

More upsude is round the corner
66,700 crossed by the market
25.74 24.08 6.89% which is bullish indication for
white metal
Silver

67,840 63,600 6.67% Broader Triangle Breakout noticed

with target of $29 @ COMEX
616 target met If we keep aisde some probable
3.63 3.53 2.83% shallow correction the metal, copper
holds the promise to have a great bull
Copper run . Interim correction may be a
possibility
616.9 601 2.65%

We expected upside from support 88.40 is the last swing low , if that
DXY 90.02 90.97 -1.04% but it continued its downside taken out ..then it will be major
journey bearishness for the index
Expectation of pullback didn’t Expecting that market will hold its
1.07%
S&P 3,699 3,660 metarialized strebngth

Near term support I snow at 13,250

1.82%
and still there is no tredn reversal sign,
Nifty 13,760.00 13,514.00 13,250 support hold perfectly so expecting present trend to continue

Currency Basket
Pairs 18.12.20 11.12.20 Change
USDINR 73.96 73.88 0.11%
GBPINR 100.21 97.49 2.79%
JPYINR 71.45 70.97 0.68%
EURINR 90.07 89.46 0.68%
EURUSD 1.2247 1.2115 1.09%
Positions
Instrument Lots Cost Close M2M
Gold 15 50915 50,305 1,353,000
Silver 10 63740 67,840 843,000
Bulldex 2 15681 15,653 42,800
Nifty 20,916
Metal Index 10 13234.8 13,975 170,000
Copper 1 615.75 616.5 1,875
2,431,591

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