Monthly Charts in Focus - July 2022

July 1, 2022

Well, well, we're zooming out and looking at the big picture again.

This is that time again where we try to see through the fog of short-term moves and identify the long-term structure of the market. Every month, this process helps have a clear vision going into the new month. So let's dive in and look at some of these charts!

Monthly charts are always a great way to redirect the mind after the short term moves we focus on during the month.

Today we're just going to touch upon some of these charts and discuss the rest of the gang in our conference call coming Wednesday! If you haven't already, you can register here and join us as we go through a roster sheet of charts!

The first chart we're looking at is the Nifty50 index. The index has displayed better resilience than other countries across the globe. We've seen the price hold on to its support over the past few volatile months and here we are again!

15,700 is an important level to track on the monthly chart. As can be seen in the chart below, the price halted at this level during the 2021 advance and is now holding on to the very same as it decides which way it wants to go. If the price gives up the support here, then the next level to track would be 13,100.

Click on the image to zoom in.

Next up, let's take a look at Small-Cap 100. If silver is the 'crazy cousin of Gold', the small caps are the crazy cousins of large caps. Any move in the large caps and the small caps will display an exaggerated version of the same.

The price here is back below the crucial 2018 highs that we've been talking about ever so often. With this move, small caps are inclined towards moving lower. In any case, there is more evidence of weakness in the market, than strength.

If you're a USDINR trader, and you're long this currency pair, then we know you've made money over the past month! The currency pair is currently trading at new all-time highs and is also just short of its resistance. With the Dollar Index gaining strength, the price action in the chart below is not surprising at all.

The trend here is clear. But if there were a logical place for the price to halt, then this would be it. We know that Nifty50 and USDINR are negatively correlated, meaning when one goes up, the other goes down, and vice versa. So if this trend is going up, then we know what will unfold in Nifty50.

These were some of the charts that stood out with respect to the important levels we're tracking. We'll have many many more to discuss in our Monthly Strategy Conference Call on July 6th, at 7:00 pm. Join us to get a complete analysis of where the market stands today.

Monthly Charts in Focus - July 2022

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