Equity indices: After reaching 5600, the Nifty has been sent back violently thus aborting any further bull charge. In our earlier report when Nifty was around 5200 we had advocated to step back a bit and wait for a pull back rally.

Affirmation of our view for a short term rally was confirmed when NIfty made a high at 5600. Medium term technical still point to a negative divergence indicating that the market may continue to drift down albeit at a slower pace.

A major trend reversal may still take some time to occur. The Midcap index again reached below the 7300 level. At this stage, we prefer to be on the sidelines rather than take a directional view.

Commodities: Amongst Base metals, Copper and Zinc appears weak and may drift slowly on the downside. Aluminium may move sideways with a positive bias. In the bullion space, Gold can witness a two directional move and Silver may retrace this week after a strong upmove in the last few weeks.

Crude will continue with its uptrend however it may remain a bit subdued this week. Currencies: USD/INR may move sideways with an upward bias. EUR/USD is trading close to an important resistance. It is a wait and watch. USD/JPY may remain weak and is trading closer to important support. DXY is also trading closer to its support and a temporary pull back may occur.