Weekly Technical View

Weekly Techincal View of NIFTY, BANK NIFTY, USD/INR, GOLD, CRYPTO,CRUDE

NIFTY :- The past week saw an inside candle with a smaller range of 15860-16250. Still the range of 16240-330 range remains a strong supply zone. However, there is a potential to breach if we see a close above 16200.The market remained in a consolidation range/mode between 15900-16200 as observed in the previous weekly report. 

 

A few observations from the weekly charts are:

• Weekly charts suggest that the Index is at another crucial range 
  • A close above 15900 is considered positive. To be more precise, with a 16930 break the Index is back in to the long term trend line starting from Mid Feb 21.
  • Still the Index is unable to penetrate the 16300-330 resistance. 
    A clear break above 16330 could lead to a quick move towards 16450 and then possibly 16650-700 range. More short covering likely to happen above 16330-400 range
  • Oscillators are showing positive signal on both Daily and weekly charts
  • Expected scenarios for the ensuing week
    • A few interesting observations from the weekly chart
      • For now, 15800-900 range seem to be creating a second base. 
      • Daily close below 15800 could make the Index drift lower.
      • We see strong interest on either side with 15850 taking support from lower end of the channel and 16240 the resistance caused by the downward sloping trend line from Apr 22
  • Monthly chart shows signs of some pullback. However, the oscillators are still showing negative signs
    • Staying above 16100 which is (Mid-BB on monthly chart) is important for possible attempt of 16500 if manages to breach 16330 
    • There exists a ray of hope to attempt 16700 
      • A quick push and a close above 16330 is the key for further gains.
      • A possibility exists for attempt of 16550 and reverses back to 16200
      • If for any reason the Index fails at 16240 multiple attempts, we may see stronger selling pressure
      • Next couple of weeks July is going to decide the fate of future course of direction of the market. Downside risk still exists till we see a Monthly close above 16700.
  • The risk perceptions appear to be changing with easing of crude prices. 
  • Market may be cautious due to concerns on Inflation or possible recession FED Rate decision towards the end of this month. 

 Bank Nifty:

As observed in the previous weekly report there exists strong hurdles around 35200 then 35500. The Bank Nifty attempted to break the crucial resistances at 35500. We saw supply coming in at higher levels. Weekly close is not a factor as the momentum is likely to be positive till we see a close below 33900. Once Bank Nifty breaks 35500 on a closing basis there could be a case for quick move to 36200. Could stay in the range of 34k & 36.5k. A close outside this range requires re-assessment. The question of whether 34k or 37k likely to get answered this week. Odds favour upside. However, Bank Nifty is the one which can create jitters with one day’s big move.

USDINR

Break above another crucial level of 79.70 has made markets and regulators to worry. Friday’s close gives some hope. A daily close below 79.60 could be a breather for the markets to see 79.20. Any dip is likely to be bought. Upside risk still exists and next level to watch would be 80.30, followed by 80.70. It is also possible that we may end up with a scenario where the Importers cover their exposure at higher levels and exporters still waiting for much higher levels.   The final LOC is 80.70. If for any reason this breaks we may see another bout of panic buying. We may expect a consolidation between 79.20-80.30. 

A close outside this range requires re-assessment of risk/direction and target.

Gold 

A break below 1730 held for four sessions and finally gave-up making the precious metal loose further shine. Now that we are almost close to Mar 21 lows. Monthly charts still show a bearish scenario. Appears that we are replicating 2013 type of down move. With a break of 1730 the scenario seems to favour more downside and the metal may see another sharp decline towards 1575 prior to which 1650 is another key level to watch. This could be one-off scenario where the inflation is raging and Gold declining.

 Crypto 

With Dec 20 lows providing decent support for the past 4 weeks, we see some stability in the crypto assets. We may expect a sharp bounce with stops below last month lows. We may see strong action in the next couple of weeks. Selling pressure likely to exist on every spike. There are chances that we may see huge short covering in the coming sessions. While retail Investors might be shying away from this asset class for some more time, the big guys might attempt to take the prices higher. 

Crude 

Second consecutive week seeing the crude prices falling. There are chances that A weekly close below 100 could see crude settling between 90 & 110 a preferred range at least for now. Only a close outside this range might require re-assessment of risk.  A daily close below 90 could lead to test of 70 the chances of which appears to be remote for the time being given the uncertainties. With Recession worries could keep the prices at check.