[Premium] July Monthly Charts

August 5, 2019

Today we're going to look at July's monthly charts and identify the changes worth noting.

The Nifty 50 failed to hold above its 2018 highs and saw downside follow-through after June's monthly indecision candle. Downside towards the bottom of its 2 year-long range at 10,150 looks likely.

Click on chart to enlarge view.

Mid-Caps made a new closing low and engulfed several months worth of action, suggesting downside momentum has picked up and the next downside target is likely 14,200.

Small-Caps are in a similar position and look vulnerable to test support 4,820 in the coming months.

The massive divergence between Large and Small-Caps continues, which is a sign of poor risk appetite among market participants. Until Small-Caps can find their footing, Equities as an asset class are going to continue to struggle.

The Nifty Financial Services Index finally saw some selling pressure. As long as prices are below 12,900, the risk remains lower towards 11,500.

State Bank of India confirming a failed breakout by reversing from its highs and sitting just on top of support near 325 (though prices are now below that level). The risk remains to the downside.

The Nifty Fast Moving Consumer Goods Index is probing support once again. While it didn't break and close below that level this time, a downside resolution looks like the most likely outcome.

The Nifty IT Index continues to hold support at 15,000. The relative strength after two months of weakness is encouraging and suggests erring on the long side of this sector.

Infosys is a leader here and continues to trend higher. As long as prices are above 740, the bias to higher towards 1,175.

The Nifty Auto Index is finally at a longer-term level of support near 6,800 but barely closed off the lows. While we'd not be pressing shorts here, we want to be patient in looking for mean-reversion setups.

Maruti Suzuki finally broke support at 6,550 and closed at the lows of the month. The bias is lower towards 4,400.

The Nifty Commodities Index broke down again, settling back into its 3,000-3,600 range.

The Nifty Infrastructure Index failed at 3,450 resistance again. Its range between 2,985 and 3,450 remains intact.

Nifty Metals broke down through support at 2,840. As long as prices are below that level then the bias is to the downside.

Larsen & Toubro is one big boy in the space, confirming a failed breakout by closing back below 1,430.

Reliance Industries continues to correct after meeting our upside price objective near 1,400. Prices closed near the lows of the month, suggesting further downside is likely. Long-term support is roughly 20% lower at 950.

Power Grid Corporation is showing some relative strength and is worth keeping an eye on. If prices can stay above 200, the bias is towards 270.

The Nifty Media Index continues to bleed to the downside. A retest of its 2018 lows and support near 1,850 is ahead.

Gold continues to trend higher after June's breakout. As long as prices are above 33,000, the bias is higher towards 38,000.

Silver finally broke out as well. As long as prices are above 38,000, the bias is higher towards 51,000.

Zinc continues to melt down with the other base metals. Aluminum remains the only one showing any sort of relative strength as of late.

Natural Gas continues to bleed lower, showing little sign of reversing. Not something we want to be short at current levels, but need to be patient if looking for an opportunity on the long side.

USD/INR is attempting to dig in at support near 69 and reverse higher after 10 months of corrective action. Bulls need to step in here and reignite its structural uptrend.