Karachi, March 06, 2013 (PPI-OT): Celebrating new peaks achieved by US equity markets

Celebratory tone prevailed on Wall Street as the Dow breached levels last seen in 2007 backed by strong data whereby a services sector indicator dispelled the bearish aura created by consensus estimates.

According to KASB Securities Limited Participants observed that the stalemate between Republicans and Democrats over the spending cuts had become a thing of the past.

The upbeat risk sentiment was also stoked by better-than-expected data out of Europe and China who pledged that growth targets will be adhered to. WTI still managed to close up higher (+0.8%) despite coming off briefly during the US session.

Key monetary policy meetings are coming up in the remainder of the week where the Bank of Japan, theBank of England and the ECB are all expected to either maintain current stance or further loosen the monetary belt. Also DOE inventory data will be out tonight along with preliminary employment data for Feb which could hold connotations for risky assets.

Key events/data releases

Source: www.forexfactory.com/calendar

Gold Spot

Technical Strategy: Buy on Weakness Although gold price failed to hold intraday highs, the price pattern witnessed during past few sessions continues to hint at efforts towards developing a base. With RSI tilting positive in relative oversold region and stochastic giving buy signal from the same territory, possibility of test of US$1,592 – 1,604 remains. KASB Securities Limited thus, recommend buying with risk defined below US$1,569.

Silver Spot

Technical Strategy: Buy on Weakness The pursuit to bottom out continued, however failed as resistance around US$29.10 remained relentless. Nonetheless, indicators including RSI and stochastics signal buy signals from oversold territory at-least for near-term. KASB Securities Limited thus recommend targeting US$29.30 – 29.60 with risk defined below US$28.35.

WTI Spot (Crude Oil)

Technical Strategy: Buy on Weakness

WTI regained 200-DMA and past two sessions’ behaviour reflects brewing strength towards US$92.70 despite overall structure being weak. The same area also coincides with 38.2% retracement level of fall from US$98.21 89.33. For near-term KASB Securities Limited recommends buying with risk defined below US$90.00. Reverse positions upon approaching close to target with risk defined above US$93.35.