Market ready for short term reversal

Part of daily newsletter sent on 3rd December 2018.

Global Stock Indices

Due to the communication between USA and China on trade war, import duty change has been postponed for 90 days. This has driven a rally in equity indices. S&P500 Dec contract closed at 2763. With this news, it made a high of 2809 in early Asian hour. S&P500 has resistance at 2820. Today, the market may behave positive. At higher level, it is advised to make short position. In next 2 days, market shall be trading downward. On Thursday, recovery is expected which may last till Friday.  In next week, Monday shall be downward.

In the current week, S&P500 can drop down to 2700-2680 on the lower side. After 12th December, market will turn bullish for medium term. With volatility, it will remain upward till mid-January 2018.

Short indices at higher level today. On Wednesday / Thursday Asian hours, cover short position and enter into long position. On Friday, cover long position and enter into short at closing hour.

S&P500 has support at 2790 and resistance at 2820.

Precious Metals

Bullion is overall bullish for this week. Gold has support at 1218 and resistance at 1238. In this week, Gold can move up to 1250-1260 while Silver can move up to 14.90-15.00 or higher. Silver has support at 13.90 and resistance at 15.00.

On 7th, it is the non-farm payroll announcement which may drive a rally in Gold and Silver.

For 2 -3 sessions from 10th December, bullion shall be trading downward.

Crude Oil

The medium term trend for crude is bullish. It will cross 65. Today, it has crossed the resistance of 53. It has support at 49. Today, trend shall be bullish. On 4th and 5th December, profit booking is possible. On 6th and 7th, it will again turn bullish (post OPEC meeting on 6th).

Positional traders shall book 50% profit at 54.00-55.00 and hold remaining position with S/L 49.

Indian Stock Market

Indian market shall open bullish today. Mixed to positive trend will be visible. On Tuesday and Wednesday, downward trend may be visible. On Thursday, first half shall be negative while second half shall be positive. This positivity may continue till Friday. On 10th – 12th December, trend is bearish. On 12th, you can long at lower level. Here onwards, market will be bullish for medium term.

Nifty can move up to 11000. From tomorrow, downtrend shall start. By 12th, Nifty can drop down below 10400.

In this week, it is also the RBI policy announcement. Also on 7th, after Indian market closes, exit polls of state legislative assembly elections will be available. On 10th, market will decline and on 11th, the result of counting will be announced. On 11th, market may witness sharp correction. It is advised to cover short position. On 12th, buy indices and stocks at dips for short term.

Last week, we said that metal stocks (such as TATA STEEL, VEDANTA, JSW STEEL) would be supportive. This week as well, steel shall be supportive

Stocks: buy & sell – only for MEMBERS.