Market Mover - BNP PARIBAS - Investment Services India

Technical Analysis – Interest Rates & Commodities
Bond & Short-Term Contracts
• Europe: ST pullback on key 3.09/12 area may be over but a further rebound is needed to rekindle MT rising bias
• US: ST pullback seen on key 3.50/55 area & market is now trying to resume MT rising bias towards 4% initially
• Short-term contracts m0: Still a MT supportive bias but ST bias remains toppish/slightly consolidative
Equities & Commodities
• WTI (Cl1): Rebounded slightly above its MT rising channel support, but be beware of a renewed break below it
• Equity markets: ST bias turned consolidative given break of MT rising pattern’s supports
US 10y: Bottoming from MT falling channel resistance towards 3.80/4.0% MT Trend: Up Range: 3.60/3.85
The break above the MT falling channel
pattern in December strengthened the MT
rising scenario which still calls for 4.35 (MT
theoretical target)
The recent ST pullback, which allowed a
return to its 3.534 resistance support area,
could be over and US 10y is now seen
correcting its January down move towards
3.766 (ST 61.8%) initially
However, to regain a MT weak bias, it still
needs to overcome 3.814 (H&S neckline)
initially, then 4.0 (June 09 top) & 4.067 (LT
61.8%)
3.152 ⇐ 3.441 ⇐ 3.534 –!– 3.766 ⇒ 3.814 ⇒ 4.00/4.067
Tech Snapshot
- Above weekly falling flag (2.826/3.534)
- MT rising wave “5” scenario still developing
- Bottom H&S pattern (neckline 3.814)
Strategy: Used dips within 3.55/65 to reenter
short side, S/L 3.50, for 4.00/4.35 &/or
add above 3.814 neckline S/L 3.70
EUR 2/30y swap: Risk towards 200 area once current pullback is over MT Trend: Down Range: 200/220
Last rebound failed to overcome the MT
61.8% (224.1) & it has broken below MT
rising wedge support (224.00) & ST rising
channel support (218.6). That increased the
risk of developing at least a ST flattening
bias towards 200 area (theoretical target of
ST rising channel break). A classic pullback
sent it back on ST channel support but risk
remains to the downside & first bearish
confirmation would come from a renewed
break below 209.4 (61.8% of recent rise). If
fall then extends beyond the 200 area, risk
will be to extend MT flattening bias towards
170/175 area (theoretical target of MT rising
wedge break & MT 61.8%)
187.8 ⇐ 199.5 ⇐ 209.4 –!– 218.6 ⇒ 224.0/224.1 ⇒ 239.2
Tech Snapshot
- MT rising wedge support break (224.0)
- ST rising channel support break (218.6)
STRATEGY: Short 216/222 stopped 212.
Resell 218/222, S/L 226, for 200 & 180
Christian Sené 12 February 2010
Market Mover, Non-Objective Research Section
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