Interest charge

Market Outlook: Charts show bears could take charge, to drag Nifty below 17,300; trade these two shares for winnings

By Vishal Wagh

US markets ended the week with a dipping red candle on Friday. Fed Chairman Powell indicated that higher interest rates for a longer period would continue to read on inflation. The statement was more or less within expected guidelines and disappointed the market. Technically speaking, the Dow Jones (DJ) has created a low low low high price formation on the daily chart. The Supertrend (8.3) also signals a strong reversal from the current DJ bear market rally. The Relative Strength Index (RSI) (14.9) has quotes at 42. Meanwhile, the 33711-34150 supply zone on the weekly chart showed strong resistance. In the next few weeks, recent lows of 29653 may be tested.

Dollar Index (DXY) (108.835)

The DXY is trading in a long-term supply zone of 106.87-109.56. It was just below the recent high of 109.29. The super trend (8.3) is positive and the RSI (14.9) is holding above 70 levels. Any break above 109.56 will open up near 115 levels.

Gold ($1736.80)

Gold has been in a correction since August 2020. It has completed its bullish move that started from the 2018 lows i.e. $1160.37 to $2075, gaining nearly 78.87%. Since then, it managed to retrace 38.20% of the move and consolidate in a range of $1,674-$2,075. Until there is no strong breach on either side, it is likely to move in the same range. Currently, it is at the lower end of the range. According to range logic, one can see gains from here. Regarding the time cycle, gold has completed two years of correction after two years of rally. It is therefore more likely to hit bottom sooner than later. Keep in mind the current inflationary situation. Gold can be the best hedge against inflation.

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WTI Crude Oil ($92.96)

Crude Oil started boiling from November last year until early March 2022. During that time, it more than doubled from $62.46 to $129.42. Since March, he has been in correction. So far, it has retraced 61.80% of the last rally and is holding well above $85. So, until the moment it breaks above $85, there are chances to rebound and resume the uptrend.

Indian Rupee to US Dollar (USDINR)

USDINR is permanently holding above the 79.50 levels thanks to DXY currently holding above the 108 levels. Following yesterday’s confirmation from the Fed Chairman, the USD may rise further and the 80.60-81.40 levels may open.

Clever (17558.90)

The Nifty saw a strong sell off from the 17992 levels. There was three days of selling up to 17345. This is the first indication of resistance in place near the 18000 levels and any bounce below the 17345 levels. 18000 can be used for short. . If one likes to wait for confirmations, one should wait for the 17345 levels to be penetrated. In the event that 17345 is penetrated, the downtrend may resume and the current bear market rally may come to a halt. As for RSI (14) and 9, the EMA of the same starts to drop below 70 levels. The super trend (8.2) is also shifted above the current bars. Thus, there are multiple indications that the bears could take over very soon.

COFORGE Future

Coforge is continuously in low high low formation. It retraced to levels close to the super trend and was sold again. It is again ready for a new low. The RSI is falling. RSC’s RSI is also showing a bearish trend. RSC also indicates a strong downward trend. Coforge is continuously in low high low formation. It retraced to levels close to the supertrend (8.2) and sold off again. The RSI is moving lower and has broken the lower 45 support zone.

There is a major supply zoon near 3933-4062 from where the stock has shown a reversal on several occasions. The demand zone on the daily chart between 3301 and 3357 will not function as major support while Friday’s high of 3650 will function as resistance in the current move. One can initiate a short position in the 3530 to 3590 range with a stop loss above the 3660 levels for a likely target of 3350.

Also Read: Nifty Below 17,400 May Drop To 17,000, Use Put Ladder For 1st Sep F&O Expiry; Bank Nifty at Mixed Trade

IndusInd Bank

IndusInd bank created a bearish diversion on RSI(14). The current bullish movement seems to have stopped and a new decline has started. The low of the last two days has already been crossed. The RSI and its moving average of 14 both started to trade below 70. The demand zone lies at the 1019-1035 and 942-959 levels.

These are two major levels that can be seen in the future to come. One can initiate a sell trade on IndusInd Bank futures between the 1062 and 1080 levels and the stop loss must be held above 1112, the expected target will be 1035 and 959 as explained above.

(Author Vishal Wagh is Head of Research at Bonanza Portfolio. Opinions expressed are those of the author. Please consult your financial advisor before investing)