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Nifty is the strongest and the most stable of all global charts and is a good investment opportunity from the long-term perspective, said Daryl Guppy, CEO, guppytraders.com.
Earlier in the session, the Tokyo bourse had staged a comeback, alongside most of the other regional stock indices, on the back of bargain hunting in beaten-down stocks and as the Dow Jones Industrial Average futures opened up more than 100 points Monday evening in the US.
In an interview with CNBC-TV18, Guppy said he did not see any “end-of-trend patterns†on both the Sensex and the Nifty and held out a target of 30,500 and 9,300, respectively, on both. “There is very low probability of the start of a downside.â€
The yellow metal started 2014 at around USD 1,200 an ounce, not too far off its current level of around USD 1,196, but in between it has hit peaks of nearly USD 1,400 and a trough around USD 1,140, after 2013`s long downtrend from opening that year around USD 1,664.
There were two significant changes on the gold chart in the past several weeks: the position of the downtrend line was adjusted to take into account the failed rally breakout in July; a move below the historical support level near USD 1,180, writes Daryl Guppy.
A decline in euro zone inflation to a five-year low in August amplified dovish comments by ECB president Mario Draghi at the Jackson Hole central bankers` meeting.
Trading channels are useful to traders and investors as they show us how price is likely to continue to develop.
There are three important trend lines on the Dow Jones Industrial Average. These trends lines are most easily seen on a weekly chart. The first is trend line A.
Daryl Guppy, guppytraders.com says he expects some retracement and consolidation around 5,700. "In terms of the Nifty, we have an upside target of around 6,400. For the Sensex, the upside target is around 21,000. In the next three-six months period, we can see those targets being achieved," he adds.
Whether it‘s disappointment or a hint that a further monetary boost to the economy is on its way, the speech on Friday from Federal Reserve Chairman Ben Bernanke is likely to trigger a strong swing in either direction in US stock, currency and bond markets, which are sitting on critical technical levels, one analyst says.
For the Nifty, Daryl Guppy, guppytraders.com says, strong support level is at 5,200. "We have moved above 5,200. We are looking now for a breakout move towards 5,700, but we are anticipating a pullback and a retest of 5,200 as a support level. So, 5,700 is our upside target, but we are looking for a retreat and a rebound behaviour," he asserts.
Weak euro/dollar, strong dollar Index and weakening gold price. That`s the new relationship and it`s infuriating some gold bugs.
One characteristic of the modern market is the high level of volatility. It manifests itself as very fast moves, particularly on the downside and with large intra-day ranges. The result is that pattern projection targets are often achieved very rapidly.
The US dollar Index has rallied quickly above $0.815 and has a clear run towards $0.89. There is minor resistance near $0.84. A strong US dollar brings a new range of tensions into trading relationships. This puts pressure on the Australian dollar.
Has the upward momentum pressure for oil prices disappeared? The NYMEX oil chart seems to have done very little in the past few weeks with the price stuck in a trading range near USD 104 to USD 105.
The Dow Index is slipping below 13,000. The US dollar Index is hovering near 80 in a weak symmetrical triangle pattern. The euro/dollar continues in a downtrend with more weakness developing. All these factors should be bullish for gold.
Daryl Guppy of guppytraders.com sees the Nifty falling to 5000 levels, or even going lower to test 4800, a month from now.
The dollar-yen chart shows a high degree of success in the Japanese central bank defense of 76 yen as a support level.
Fine Cotton was the name of an unimpressive racehorse in Australia. The poorly performing horse was replaced with a much superior look-alike substitute, which won a major race at long odds.
The Shanghai Index has staged a powerful breakout from a severe long-term downtrend. The breakout overcame two significant resistance features. The first feature was the strong resistance level near 2,300. The market consolidated around this level as the breakout developed.
There are two important changes in the price behavior of oil. Forget about the current sabre rattling in the Gulf of Hormuz. That will cause some temporary rally spikes but this is within the context of a change in the oil trend environment.
Is the current rally the beginning of a new uptrend for the Shanghai Index? This was one of the key questions I was asked when I was in Beijing earlier this week.
The crisis in the euro zone continues to get worse. The euro has fallen to support near USD 1.29. A fall below this support level has a new support target near USD 1.24.
The Euro Stoxx 50 is the leading blue chip index for the euro zone and has fallen nearly 20% so far this year, given the region`s debt crisis. Based on technical analysis, it seems the index could fall further and test 2008 lows.
A weakening China economy is a further weight on global indexes. The current global fall may have been started by the euro zone collapse but many have looked for resilience in the China economy and China demand to help lift other economies.
