Premium Members can access all of June’s Monthly Candles in our Chartbook, but in this post, we want to outline a few of the ones that stood out to us across the Equity, Currency, and Commodities space.
First, let’s start with Equities. June was a good month for stocks, with the Nifty 50 continuing to stabilize above its 2015-2016 highs near 9,000 and beginning to move higher.
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Mid-Cap stocks reclaimed their 2015-2016 highs near 14,000. As long as prices are above that level, it’s hard to be bearish.
Small-Cap stocks are also right near former support/resistance near 4,500-4,700. For now, the index is innocent until proven guilty…specifically given the action we’re seeing in the other major indices which have already cleared resistance.
Nifty Bank continues to stabilize above its 2015-2016 highs, a big positive for the broader market. As long as prices are above that level, it’s hard to be bearish Equities if the largest sector of the market is slowly working higher.
The sector’s largest component, HDFC Bank, closed out June near its highs after spending several months stabilizing above support at 820.
Nifty Fast Moving Consumer Goods continues to press towards its former all-time highs. Sideways performance in a tape that’s been horrific is a big sign of relative strength. With the sector pushing back towards all-time highs, we continue to think there’s opportunity among the components.
Here’s Hindustan Unilever hanging out near its all-time high. A breakout above 2,300 would signal the continuation of its long-term trend, with a target near 3,610.
Despite the rally we’ve seen in the Nifty Media Index, Zee Entertainment has struggled to get above resistance near 190. Prices getting above resistance would go a long way in the sector continuing to the upside.
The Nifty IT Index has held above support near 12,100 and is pushing back to the upside. Much like the Nifty FMCG Index, we think there are opportunities here.
Nifty Auto is approaching major resistance near 7,100. This is a huge level for a sector that’s attempting to stabilize and reverse its downtrend.
Here’s the sector’s largest component, Maruti Suzuki, also approaching a confluence of resistance near 6,150.
Same with the second largest component, Mahindra & Mahindra, struggling with resistance near 550.
If Nifty Auto is going to break out…these two stocks need to be above resistance as well. We’re watching that closely in the weeks/months ahead.
Reliance Industries Ltd. made new all-time monthly closing highs. As we outlined in this post, we think this move could be just getting started.
Bharat Electronics stabilized above support at 65-75 and finally moved higher. This was one of the many names we outlined as a way to play the Small/Mid-Cap resurgence. If this bull market in stocks is just beginning, stocks like this that have experienced significant drawdowns will continue to lead.
In the Base Metal space, Lead has stabilized above support near 132-136. As long as prices are above that level, then the bias is higher back towards all-time highs.
Here’s Zinc getting back above 150-155 again, another step in the right direction for Base Metals.
And here’s Copper, a big part of our Five Bull Market Barometers, which remains the strongest Base Metal. With that said, prices are now near long-term resistance near 470-480, so we’re watching closely to see if sellers emerge where they have for the past decade.
Gold continues to trend higher. Nothing new here, though after 7 straight months of upside some consolidation would not be surprising.
Silver, although closing above resistance near 48,000, continues to work through the overhead supply near that level. As long as we continue to get monthly closes above that level, then the bias is to the upside from a longer-term perspective.
Here’s Mentha Oil making new lows after breaking support near 1,100. This remains one of our actionable setups in the Commodity space as the longer-term trend is now clearly to the downside.
Last, but not least, is the Rupee. The Euro/Rupee pair made a new high in June but failed to break above resistance near 88 and closed well off the intra-month highs. What’s very interesting to us is that despite the broad-based weakness in the Rupee, we’ve still not seen the structural breakouts we’ve been waiting for in the four major pairs. This is important information and may be suggesting that a trend change could be underway.
These were the trends that stood out to us in June. A lot of the themes we’ve already been talking about continued to work, while potential inflection points in areas like Nifty Auto and the Rupee are worth keeping an eye on as we head into the second half of the year.
What are your key takeaways? Let us know!
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