It was mentioned last week that crossing 23893 would be the key level to watch on the upside, and a close below 23262 on the downside would lead Nifty into further selling pressure. The high of 23733 recorded on the very first trading day remained the highest level of the past week. Although it touched 23151 at one point on Wednesday, the bulls managed to sustain the closing above 23400. Closing at 23366 at the end of the week, it was notable that the selling pressure was primarily concentrated in the IT and Metal indices. The heavy selling witnessed in the American market after the Indian market closed on Friday spread gloom in the bull camps during the holidays. Much better-than-expected job data, coupled with already high inflation, raised concerns that the US is moving towards a scenario of interest rate hikes. Additionally, a statement from the Anthropic founder suggesting it might be better to step back a bit—as AI is advancing to a capability of analyzing things on its own without human intervention—caused a profit-booking trend across all sectors.
Looking at the Dow Jones, it closed at 50866 last week. On the downside, the support at 48300 is the main level to watch; if it sustains a close below this, it will be a sign of a prolonged correction extending down to 39590. However, if 48300 holds, the upward momentum towards 51780-52628-54902 levels could continue. Nasdaq closed at 25709 last Friday; this fall came after reaching its target of 27025. There is now a possibility that this target will become a critical boundary. If it fails to cross and close above this, it could push Nasdaq into a very severe crash down to 12642. Major Nasdaq stocks like Nvidia, Apple, Amazon, Google, Broadcom, and Micron had been making massive rallies for quite some time. Tesla, on the other hand, is preparing for the biggest IPO in world history. Looking at the Nvidia chart, the 220-232 level has formed as a strong resistance zone. Now standing at 205, if this stock loses the 194.50 support as well, it will face heavy selling. Sustaining below 389 indicates increasing bear dominance over Broadcom too. Many of these stocks were heavily inflated, riding on a bubble of expectations. Consequently, a spike in bond yields wreaked storm-like destruction on these equities the other day. The S&P 500, where these same stocks hold top weightage, also witnessed a massive crash recently. For the S&P 500, currently at 7383, the 7426-7595 levels have built strong resistance on the upside. If it fails to decisively breach and close above these, the downside levels awaiting are 6217-5247, and perhaps even a move down to 3806. In a scenario where the aforementioned resistance zones cannot be broken, one must expect this much of a downside.
The Rupee closed at 95.13 recently. The chances are higher for the Rupee to consolidate and remain strong within the 95.75-93.81 range. The Dollar Index has reached 100.05; a close above 99.34 has opened up a move towards the next resistance line of 101.43. If it manages to cross and close above this level too, it will mark the beginning of a bullish trend in the Dollar Index. Gold lost its support of 4422 last week and closed at 4365. Sustaining below 4422, Gold is moving towards a prolonged correction down to 3482. Silver lost its 75.24 support in the very first few days last week and closed at 69.10. The next major support is at 60.87. On the upside, the 75.24-77.37 levels will continue to act as resistance zones.
As mentioned earlier, Nifty closed at 23366 last week. In the coming days, the first resistance on the upside will be 23547. On the downside, the 23242-23150 levels are the ones to watch first. If it loses these and closes lower, then the 22900-22720 levels will become the next support. In the event this is also lost, the next move towards 22400 can be expected.