By Vishal Wagh
The US markets ended the week with a dip red candle on Friday. FED chairman Powell indicated that higher interest rate for longer time would continue to get read of Inflation. The statement was more or less on expected guidelines and disappointed the market. Technically Speaking, the Dow Jones(DJ) has created a lower low lower high price formation on the Daily chart. The Supertrend (8,3) is also signaling a strong reversal in the current bear market rally in DJ. The Relative Strength Index (RSI)(14,9) has quotes at 42. At the same time, the supply zone of 33711-34150 on the weekly chart has shown a strong resistance. In the coming few weeks, recent lows of 29653 may be tested.
Dollar Index (DXY) (108.835)
The DXY is moving in a long-term supply zone of 106.87-109.56. It was just shy of the recent high of 109.29. The super trend (8,3) is positive and RSI(14,9) is holding above 70 levels. Any breakout above 109.56 will open gets for upside near 115 levels.
Gold is in correction since August 2020. It has completed its bull move which started from the lows of 2018 i.e. $1160.37 to $2075 gaining nearly 78.87%. Since then it has managed to retrace 38.20% of the move and consolidate within the range of $1674 to $2075. Till there isn’t a strong breach to either side it is likely to move in the same range. Currently, it is in the lower part of the range. As per the logic of range, one can see some gains from here. As far as the time cycle is concerned, the gold has completed two years of correction post two years of the rally. So, there are higher chances that it will bottom out sooner than later. Keep the current inflationary situation into consideration gold can be the best inflationary hedge.
WTI Crude 0il ($92.96)
The crude oil started boiling from November last year till early March 2022. Within the said period it had gained more than double, from $62.46 to $129.42. Since March, it is in correction. Till the time it has retraced 61.80% of last rally and holds well above $85. So, till the time it is above $85 there are chances of bouncing back and resuming the uptrend.
Indian Rupee Vs US Dollar (USDINR)
USDINR is continuously holding above 79.50 levels thanks to DXY which is holding above 108 levels currently. Post yesterday’s confirmation from the FED Chairman USD may gain further and levels of 80.60-81.40 may get open.
The Nifty has seen a sharp sell-off from the levels of 17992. There were three days sell-off of till 17345. It is the first indication of resistance in place near 18000 levels and any bounce below 18000 levels can be utilized to go short. If one like to wait for confirmations one needs to wait for the levels of 17345 to get penetrated. In case 17345 gets penetrated then one can see the resumption of the bear trend and the current bear market rally come to halt. As far as RSI(14) and 9 EMA of the same is started moving below 70 levels. The super trend (8,2) is also shifted above the current bars. So, there are multiple indications that the bears may take charge very soon.
Coforge is continuously in lower low high formation. It has retraced levels near to supertrend and again getting sold-off. It is ready for new low again. RSI is moving downwards. RSI of RSC is also showing bearishness. RSC is also indicating strong downward trend. Coforge is continuously in lower low high formation. It has retraced levels near to super trend (8,2) and again getting sold off. RSI is moving downwards and it has broken the lower support zone of 45.
There is a major supply zoon near 3933-4062 from where the stock has shown reversal multiple times. The demand zone on the daily chart between 3301-3357 will not work as major support whereas, Friday’s high of 3650 will work as resistance in the current move. One can initiate short in the range of 3530-3590 with stop loss above 3660 levels for probable target of 3350.
IndusInd bank has created a bearish diversion on RSI(14). The current up move seems to halt and a new downside has started in it. The last two-day low has already been breached by it. The RSI and its moving average of 14 both started to trade below 70. The demand zone is at 1019-1035 levels and 942 to 959 levels.
These are two major levels one can see in the coming future. One can initiate sell trade in IndusInd Bank future in between 1062-1080 levels and stop loss should be kept above 1112 the expected target will be 1035 and 959 as explained above.
(Author Vishal Wagh is Head Of Research at Bonanza Portfolio. The views expressed are the author’s own. Please consult your financial advisor before investing)