2022-05-20 07:45:00

Daily Technical View


Nifty bulls get a whack; one day affair. The move has been sharp 500 600 plus in just two days. The popular move in late 2007 Bhool Bhulaiya Version 2 is on release. 2008 was a nightmare for the financial markets. A simple causation we are seeing this again, do socio factors play part in the financial markets? Yes and No. Will leave at this. What is more important is 89 EMA Weekly in the last 10 years did through interesting bites. 2011-2014 more or less range market violation many times and we focus on the down side. Average moved to the downside is 8%. Return back in 2016 (bear market) again down move of 13%. Let`s look at the bull markets, 2017 and 2018 both failed after a fall of roughly below 3%. We are now at the door of 89 EMA stands at 15659.  For the hope full bulls it should not ideally go below 15200 (very interesting number indeed! as cluster of supports stay there). If we give away that (just an big if) then we stare at 14000 (assuming a downward range bear market of the larger bull market). This clearly paves way for allocation of capital in the range of 14000-15200. Shut it. Fill it. Forget it. For the day the fall has been sharp hence minor rally can be expected. But the threat remains to the downside. Bull need past 16000 on close basis, while bears need to take out recent low on close basis. Dice in favour of bears. But week end can bring boring volatile range. 15700-16000 range can work but bias to sell rally and not to try the bottom. 

Nifty bank, bear`s pounce and hard. There is not a single occasion of equity market performing when credit markets are in stress. The spread on HY Debt is highest in last 5 years. That is interesting. Last five years bank nifty held the 89 Weekly EMA. The correlation once again reminds the bull market abrupt end from the early 2000 to late 2007 (Once again strongly held each move down, for viewing the chart, access my link on the trading view).  We are already below this line and in fact, teasingly the bearish head and shoulder pattern. It requires no genius these days to offer sell calls. Watch this space. If we give way to 32000 then it would be let loose and that is 13000 points away. It can be a day`s job for the bears, but bulls have lots of work. Dice in favour of bears. For the day once again, expiry led support around 33000 yesterday remains focus, else shorts remain below 34100 for move towards low 32000 (May not be a today`s take).

XAUUSD:-  When there is a base, there is a bounce. However, it fell short of the 1850-60 area and that suggests some more consolidation as the conviction lacking. Higher base circling remains 1810-1860.  

XAGUSD:- Borrows strength from the precious metal rally, some calm returning to the market and a patchy dollar. Critical for the bulls to hold 21.50 line in sand on the long term. For the near term 21.20 remains the next leg for the bears. Else 21.20-22.20 dictates.