2022-05-19 08:00:00

Daily Technical View

Daily Technical View on NIFTY,  BANK NIFTY, GOLD & SILVER


*Nifty:- BEAR’S “TARGET”*
Nifty bulls rose in style gave the bears the expected teasing level to show their might. Elsewhere Target in US crashes 25% such is the ferocity of -the down move in the wings. Don`t underestimate and allocate without understanding the new cycle of uncertainty.  It started with supply chain issues, brushed aside as short term impact, then the Ukraine War, brushed aside as not possible, again everyone implied even if it happens it would be short and prolonged. Now both are real. Also whenever the credit markets are under stress equity wont perform better. The Volatility in Crypto and Tesla are same. Imagine this. While all this looks events elsewhere, we cannot wish this influence every else in a connected world. Target is another example where in periods of recession,  defensive sector or rotation to staples but this one goes down. In this bear cycle discretionary is only cash. Significant Risk off moves does unfold with CHF, JPY rallying as well as the yields. VIX is shy of hitting high 40. All this does not augur well for the bulls, for the bears they sit tight. Our view on yesterday short looks sweet today as one can expect a deep cut opening going by the clues of SGX and other markets. For the day one more stab 16000 or even lower?  Remember if we break 16800 vomiting would be more not less. Difficult day to suggest intra-day range, but one can expect a bounce from 16050-16000 which would remain short lived.

Nifty bank, on 17th when markets moved the up move tad less than the broader market, yesterday it leads. Attached graph is ten year and we are closer to the selected moving average. In 2016 it briefly moved but jumped back in fashion. 2020 is any one`s story. The current move is eroding this space and if we close on monthly basis spells bigger trouble. Can the bulls avoid this is the question. Yesterday MPC minutes reveal the kind of extreme views and wordings ranging from "forced to hike" to 100 bps point. The question why do with 40 on a day when FOMC is about to deliver the much telegraphed hike?  Is it not a story of covering the credibility. Markets hate uncertainty and this one is no different. If you have not shorted, there is no one to blame. If you have not taken profits on longs no one to blame. Difficult to suggest a level to short as the clues continue to be big gap down. Despite the fact the rise is capped below 34000 close basis and we are headed to mid 32000.

*XAUUSD:-* Serious Risk off in assets usually prints a bull move here. The seeds are seen. Consolidation and break higher 1830 is the view held while we stay above 1795. In fact this can be further squeezed 1805 on two hourly close basis. Clear sings of Candles and oversold can have a quick fire towards 1855-60 without troubling much the bears. Only a close above 1890 threatens.  

*XAGUSD:-* Stuck in the metal space and precious metals space. 21.20 stops for longs while shorts can wait. Remain muted before a consolidation. Gold/Silver ratio can play a spoil sport here.