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In the previous weekly technical note, it was mentioned about the vulnerability that the market faces due to extremely low levels of VIX. It was expected that such low levels of VIX had left the markets vulnerable to violent profit-taking bouts from higher levels. Precisely on these lines, the Indian equities saw corrective bouts through the week with VIX spiking higher on such occasions. The trading range expanded on the anticipated lines; NIFTY oscillated in a 499-point range over the past five sessions. Despite a decent pullback on the last trading day of the week, the headline index closed with a net loss of 129.05 points (-0.66%) on a weekly basis.

From a technical perspective, the high point of 19991 has now become an intermediate top for the markets. In the process of retracement from higher levels, NIFTY has also dragged its resistance down to 19750 levels. This makes the zone of 19750-19900 a strong resistance area for the markets unless taken out comprehensively. The Options data also suggest a very high accumulation of Call OI between 19800-20000 levels and this makes the zone a formidable resistance for the Index. The VIX, which came off by 5.47% on the last trading day of the week continues to remain at dangerously low levels. Despite the retracement that we saw over the past week, the INDIAVIX has risen by just 4.32% on a weekly note.

The coming week is expected to see the levels of 19620 and 19750 acting as strong resistance points. The supports are likely to come in at 19380 and 19200 levels. 

The weekly RSI stands at 67.87; it stays neutral against the price but it has slipped below 70 after staying inside the overbought zone. The weekly MACD is bullish and stays above the signal line. A candle with a long lower shadow occurred; although this needs confirmation on the next bar, it has the potential to keep the markets under consolidation while disrupting the current rally. 

The pattern analysis of the weekly charts shows that NIFTY achieved a breakout as it surged past the previous high point of 18887; the breakout saw the Index surging almost 1100 post the breakout. However, it has formed the high at 19991 and this has now become an intermediate top for the markets for the near term unless taken out comprehensively. 

All in all, the texture of the markets will continue to stay defensive and highly stock-specific. Also looking at the global technical setup, it should not be surprising to see some risk-off play happening in the markets. It would be wise to cut exposures into high beta and economy-facing names. From the banking space, PSU banks are likely to relatively outperform the private baking names. It would be prudent to stay invested in defensive quarters like IT, Consumption, PSE, etc., while also staying stock-specific while picking stocks. A cautious outlook is advised for the coming week. 

Sector Analysis for the coming week

In our look at Relative Rotation Graphs®, we compared various sectors against CNX500 (NIFTY 500 Index), which represents over 95% of the free float market cap of all the stocks listed.

The analysis of Relative Rotation Graphs (RRG) shows an evident lack of leadership as well as a defensive setup as the Pharma Index is the only one that is comfortably placed inside the leading quadrant. The Nifty MidCap 100 index is inside the leading quadrant along with the Realty Index. Out of these two, Realty Index is seen slowing down and paring its relative momentum against the broader markets.

The Nifty Auto and Consumption Indices have rolled inside the weakening quadrant. Besides this, FMCG, PSE, and Infrastructure Indices are inside the weakening quadrant as well. However, among these groups, PSE and Infrastructure Indices are showing improvement in their relative momentum.

Nifty Services Sector, Financial Services sector indices, and Banknifty are seen languishing inside the lagging quadrant. Along with these groups, Commodities and IT groups are also inside the lagging quadrant.

The Energy, Metal, and PSU Bank indices are inside the improving quadrant and are seen rotating firmly in the northeast direction. They may show resilient performance against the broader markets.

Important Note: RRG™ charts show the relative strength and momentum of a group of stocks. In the above Chart, they show relative performance against NIFTY500 Index (Broader Markets) and should not be used directly as buy or sell signals.  

Milan Vaishnav, CMT, MSTA

Consulting Technical Analyst

www.EquityResearch.asia | www.ChartWizard.ae

Being able to efficiently drill down from Sector to Industry Group to best Stock ideas is critical to an effective methodology. John Colucci guest hosts this episode of Power Charting to illustrate such a method and the scanning principles developed for the ‘Wyckoff Market Report’. Johni Scan (editor) does a tour of the Wyckoff Market Report (WMR) by drilling down into some compelling stock ideas that were revealed by the WMR scanning techniques. To learn more about the Wyckoff Market Report (click here).

Click on this link to watch: Stock Selection with the Wyckoff Market Report

Power Charting TV

Announcement: Technical Analysis Program at Golden Gate University, Webinar

Golden Gate University is excited to announce the re-launch of the historic graduate program in Technical Analysis. Graduates of the program will receive an MS in Finance with a concentration in Technical Analysis. On August 11th a FREE 30 minute webinar will announce this new program, describe the first class and review the history of this storied graduate program. Dr. Anitha Manohar, Associate Professor of Finance, Brett Villaume, CMT, CAIA Adjunct Professor and Bruce Fraser Adjunct Professor will present. To learn more and to register for this FREE event (click here).

Topic: MS Finance Degree Program with a concentration in Technical Analysis at Golden Gate University.

When: August 11, 2023, 12pm PDT

Webinar Link: To attend without registration simply click this link at the start of this event (CLICK HERE).

All the Best,

Bruce

@rdwyckoff

Amber Matherly had planned to move into her new apartment Thursday.

To do so, Matherly, a Dallas resident, had deposited a check into her Wells Fargo account the previous evening; she also expected a direct deposit to hit by the time she awoke.

But when the morning rolled around and she went to check her account, Matherly found that not only were the deposits missing, but that her entire account had been overdrawn by hundreds of dollars.

‘Entirely panicked,’ Matherly said, she raced to a local Tom Thumb convenience store to get a money order, and ended up having to borrow $500 from a friend to get the funds necessary to secure her new keys.

‘I have never had any issues with them before, so this was shocking,’ said Matherly, who said in a message to NBC News that she’s been with Wells Fargo since about 2009.

For the second time this year, Wells Fargo acknowledged that deposits were not showing up in customers’ accounts. In an emailed statement Friday morning, a Wells Fargo representative said the issue was affecting a ‘limited number of customers,’ and that ‘the vast majority’ of instances had been resolved before noon, while the ‘few remaining’ would be resolved soon.

This week’s incident mirrored one encountered by Wells Fargo customers in March, which the company then blamed on an unspecified ‘technical issue.’

The Wells Fargo representative declined to comment further Friday about what caused this week’s incident, nor specify whether it was related to the March incident, nor exactly how many customers had been affected.

The outage comes as NBC News reports phony bank accounts have resurfaced at Wells Fargo. The bank has paid billions in fines and has cycled through two CEOs since the issue was first reported in 2011. This time, the issue was blamed on third-party fraudsters. Wells Fargo representative Amy Bonitatibus told NBC News that allegations of unlawful activity by Wells Fargo are without merit and that identity theft is a broad industry problem that the bank is working to address.

Customers nationwide appeared to be affected by this week’s outage.

Jeani Cortez, a single, disabled, self-employed accountant and Alaska resident, says she was supposed to have paid her rent, gas, electric and internet payments for the month by now with funds she deposited Wednesday.

She said she was told Friday by a Wells Fargo representative that she would not be able to access her deposit for another three to five business days. She’d earlier been told that Wells Fargo could send her a letter to give to her creditors; that too has not arrived.

‘There is simply not enough funds (without that deposit) to cover them all,’ she wrote in an email, adding: ‘I simply cannot live without my funds now.’

For Brent Morrison, a Texas resident and father of two, the Thursday outage was doubly painful: He was laid off less than two weeks ago.

‘That money was a little bit important to me yesterday,’ Morrison said in a phone interview Friday.

While the funds — approximately $2,000 — ultimately did appear in his account, Morrison said he’d also been affected by the March outage, so he is now looking to move his money to a local bank, he said.

‘They lost a customer. I just have no choice,’ Morrison said. ‘It just doesn’t make sense to continue with them. The words ‘banking’ and ‘confidence’ shouldn’t end in a question mark.’

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Wind power developers proposed four new projects off the New Jersey Shore on Friday, a surge that would more than double the number of wind farms built off its coast if they are approved by regulators.

At least two of them are more than twice as far out to sea than others that have drawn the ire of residents who don’t want to see windmills on the horizon. These two would not be visible from the beach, the companies proposing them say.

They would join three wind farms already approved by New Jersey regulators as the state races to become the East Coast capital of the fast-growing offshore wind industry.

In the first project to be made public Friday by the companies proposing it, Essen, Germany-based RWE and New York-based National Grid applied for permission to build a wind farm in the waters off Long Beach Island. Their joint venture is called Community Offshore Wind, and it aims to generate enough electricity to power 500,000 homes.

Unlike other projects that have drawn intense opposition from homeowners in part because they are close enough to the Atlantic City and Ocean City shorelines to be seen by beachgoers, this project would be built 37 miles offshore and would not be visible from the shore, said Doug Perkins, president and project director of Community Offshore Wind.

He said the project has ‘the potential to transform New Jersey into a nation-leading clean energy development, training and manufacturing hub.’ He said his company is the second-largest wind power developer globally, following Danish wind developer Orsted.

Community Offshore said it has not yet determined how many wind turbines would be built as part of the project.

The second bid was submitted by Chicago-based Invenergy and New York-based energyRE for a project 40 miles off Long Beach Island called Leading Light Wind. It would consist of up to 100 turbines, enough to power 1 million homes.

The company is playing up its American ownership as the foreign ownership of key players in New Jersey’s offshore wind industry has generated opposition in some quarters.

‘Leading Light Wind is ready to build out a world-leading domestic offshore wind industry with American-led ingenuity and expertise,’ said Ryan Brown, energyRE’s chief operating officer.

And the two companies that received approval to build the Atlantic Shores wind farm — Shell New Energies US and EDF Renewables North America — submitted a bid to build a second as yet unnamed project 10 to 20 miles offshore. The companies have lease areas in the large expanse of ocean between Atlantic City and Barnegat Light on the northern tip of Long Beach Island, but they did not specify exactly where the second project would be built.

They also did not say how many turbines it would include or how many homes its electricity could power.

Friday night, the New Jersey Board of Public Utilities said a fourth application had also been received, but would not release any information about it. The company or companies proposing it had not come forward publicly to discuss their plans.

Community Offshore and Leading Light said that while they plan to take advantage of existing federal tax credits, they will not seek the same sort of tax break that New Jersey recently approved for Orsted, which is being challenged in a lawsuit brought by opponents of offshore wind.

Atlantic Shores, which earlier this year indicated it wanted similar tax relief to that given Orsted, said Friday it is not asking for anything specific from state government but is in talks with the governor’s office, the utilities board and the Legislature about what might be possible.

The proposals unveiled Friday come in addition to the three projects already approved by New Jersey regulators. Orsted is building two wind farms, called Ocean Wind I and II. And Shell New Energies US and EDF Renewables North America are partnering on the Atlantic Shores project.

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A zoning committee has ordered a northern Wisconsin brewery that has supported Democratic political figures to close its doors.

The Oneida County committee revoked Minocqua Brewing Company’s permit on Wednesday, Wisconsin Public Radio reported. The committee members said owner Kirk Bangstad violated prohibitions on outdoor sales.

Bangstad told the committee he has allowed people to sit outside the establishment but insists he’s really just being punished for his liberal views.

Bangstad ran for Congress as a Democrat in 2015 and for State Assembly in 2020. Among the beers the brewery offers are Evers Ale, named for Democratic Gov. Tony Evers, and Tammy Shandy, in honor of U.S. Sen. Tammy Baldwin.

Bangstad also runs the Minocqua Brewing Company Super PAC, which has purchased billboard ads attacking Republicans and raised more than $1 million during the 2022 campaign cycle, federal campaign finance data on OpenSecrets.org showed.

The zoning committee’s chairperson, Scott Holewinski, told Bangstad during Wednesday’s meeting the committee has treated him fairly and that there was ‘nothing political’ between the two of them.

‘You keep (saying) we’re after you because you’re a liberal, because you’re a Democrat,’ Holewinski said. ‘You make this all up against us.’

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Former President Trump blasted President Biden as the ‘most incompetent and corrupt president in U.S. history’ while slamming his ‘protectors’ and the ‘rabid’ prosecutors who he says are engaging in 2024 ‘election interference’ after indicting him three times this year.

Trump, the 2024 GOP front-runner, spoke Friday night at the Alabama Republican Party’s annual summer dinner event.

He spoke at the event just a day after he pleaded not guilty to four federal felony charges from Special Counsel Jack Smith’s Jan. 6 investigation.

Trump pleaded not guilty to conspiracy to defraud the United States, conspiracy to obstruct an official proceeding, obstruction of and attempt to obstruct an official proceeding and conspiracy against rights.

‘Every time the radical left Democrats, Marxists, communists and fascists indict me, I consider it a truly great badge of honor,’ Trump said Friday night. ‘Because I’m being indicted for you.

‘On Election Day 2024, we are going to evict crooked Joe Biden from the White House. We are going to expel the criminals and thugs from the halls of power in Washington. And we are going to make America great again.’

Trump said the MAGA movement ‘has been the only force in American politics that has ever dared to stand up to the entire corrupt political establishment.’

‘We said no to open borders, no to globalist trade deals, no to endless wars and no to the Godless values of the communist left,’ Trump said. ‘We always put America first.

‘In response, our enemies unleashed an army of rabid left-wing lawyers, corrupt Marxist prosecutors, deranged government agents and rogue intelligence officers to try to stop our movement.

‘As an example, every one of these many fake charges filed against me by the corrupt Biden DOJ could have been filed 2½ years ago, but they waited and waited until I became dominant in the polls. And then they filed them all, including local DAs and AGs, and other cases, right in the middle of my campaign, where I am leading the Republicans by a lot and also leading Biden by a lot,’ Trump said. 

Trump said it is ‘called election interference — a commonly used tactic in Third World countries.’

‘Biden and his protectors know he cannot win this race any other way, so they are trying election interference,’ Trump said. ‘The reason this is happening is simple: Joe Biden is the most incompetent and corrupt president in U.S. history.’

Trump slammed the ‘Biden crime family’ and questioned the timing of his three indictments this year.

‘The Biden crime family was taking in money from China, Ukraine, Russia and so many more. And now, every time more Biden corruption is exposed, his henchmen indict me the very next day,’ Trump said. ‘It’s called a cover-up.’

In April 2023, the U.S. House heard testimony related to Biden’s alleged mishandling of classified records. Soon after, Manhattan District Attorney Alvin Bragg charged Trump with 34 counts in New York of falsifying business records related to hush money payments made during the 2016 campaign. Trump pleaded not guilty to all counts.

On June 8, Fox News Digital was first to report the detailed contents of the FBI’s FD-1023 form, which contained allegations the CEO of Ukrainian natural gas firm Burisma Holdings paid Joe Biden and Hunter Biden $5 million each.

Hours later, Trump was indicted in Smith’s probe into Trump’s alleged improper retention of classified records from his presidency. Trump pleaded not guilty to 37 counts, including willful retention of national defense information, conspiracy to obstruct justice and false statements.

Last week, just a day after Hunter Biden’s plea deal fell apart in federal court, Smith charged Trump with an additional three counts as part of an indictment in the classified records probe.

Trump was indicted Tuesday as part of the investigation into the Jan. 6 riot, just a day after Hunter Biden’s longtime business partner, Devon Archer, testified before the House Oversight Committee and shared details of Joe Biden’s involvement and knowledge of Hunter’s business deals.

‘They want to take away my freedom because I will never let them take away your freedom,’ Trump said. ‘They want to silence me because I will never let them silence you.

‘In the end, they’re not after me, they’re after you — and I’m just standing in their way.’

Trump also vowed, if elected, to appoint a special prosecutor on his ‘first day in office’ to ‘study each and every of the many claims being brought forth by Congress concerning all of the crooked acts, including bribes from China and many other foreign countries that go into the coffers of the Biden crime family.’ 

‘The deep state is destroying our nation,’ Trump said. ‘But the tables must turn, and we will destroy the deep state.’ 

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The U.S. Air Force this week announced a successful flight of an unmanned jet with advanced artificial intelligence and machine-learning capabilities that move it a step closer to its goal of having pilots fly alongside AI-managed wingmen.

The Air Force Research Laboratory (AFRL) announced Wednesday that an XQ-58A Valkyrie flew a three-hour sortie in late July that was directed by AI and machine-learning systems developed by the lab. While avoiding some details, AFRL said the plane demonstrated the ability to process information needed to complete the mission that should contribute to the Air Force’s plan to expand the use of autonomous aircraft.

‘The mission proved out a multi-layer safety framework on an AI/ML-flown uncrewed aircraft and demonstrated an AI/ML agent solving a tactically relevant ‘challenge problem’ during airborne operations,’ said Col. Tucker Hamilton, the Air Force’s AI test and operations chief. 

‘This sortie officially enables the ability to develop AI/ML agents that will execute modern air-to-air and air-to-surface skills that are immediately transferrable to other autonomy programs.’

A spokesperson for the Air Force confirmed to Fox News Digital the test is seen as a step toward the goal of building a collaborative combat aircraft (CCA) system. The goal is to develop autonomous AI and machine-learning powered aircraft that can fly with and help human pilots make faster combat decisions.

In March, Air Force Secretary Frank Kendall said he’s planning on using at least 1,000 CCAs once they are up and running. ‘

‘CCAs will dramatically improve the performance of our crewed aircraft and significantly reduce the risks our pilots face,’ Kendall said in remarks to the Air Force Association.

The Air Force spokesperson said the CCA program is still under development, which means it’s not clear exactly what role AI-managed aircraft would play alongside human pilots on a mission. But the spokesperson said the goal is to have the AI systems run more of the routine systems and process data during the mission, leaving the pilot with more time to concentrate on the critical aspects of the mission.

An analogous example of autonomous systems already incorporated in U.S. fighter jets is the automated ground collision avoidance system, developed over the years because pilots in a steep dive can lose consciousness before they’re able to recover the plane.

‘That’s an example of autonomy we’re already using,’ the spokesperson said. ‘So, we’re trying to mature these algorithms so they can do more and more for us.’

‘AI will be a critical element to future warfighting and the speed at which we’re going to have to understand the operational picture and make decisions,’ said Brig. Gen. Scott Cain, AFRL commander. 

‘AI, autonomous operations and human machine teaming continue to evolve at an unprecedented pace, and we need the coordinated efforts of our government, academia and industry partners to keep pace.’

The Air Force budget proposal for 2024 proposed spending $490 million on the CCA program, which it said would ‘allow our Air Force to maintain effective deterrence and control the skies.’

‘By accelerating development of CCAs, the Air Force will be able to augment current and future platforms with lower cost complementary systems that increase lethality and exchange ratios in highly contested environments,’ the budget said. 

The Air Force bills the XQ-58A as a low-cost option compared to piloted aircraft that can be used for several missions but one that is ‘built at a cost that permits it to be a combat loss.’

The Air Force asked Congress for $5.8 billion over five years for the CCA program.

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A Colorado gun reform law that will prohibit people under 21 years old from purchasing a gun will go into effect on Monday.

SB23-169, one of several sweeping gun reform measures approved by the state legislature and signed by the governor in the spring, will prohibit people under the age of 21 from purchasing a gun, with exceptions for active members of the U.S. armed forces, peace officers and people certified by the Peace Officer Standards and Training board.

Local gun shops and shooting ranges say the new law might lower profit, but they are more worried about the people who will be unable to protect themselves.

‘People under the age of 21 are no longer going to have the right to defend themselves with firearms,’ DCF Guns store manager Kevin Day told Fox 21. ‘The best thing we can do is continue to educate the public.’

Some gun groups, including the Rocky Mountain Gun Owners, have filed lawsuits against Democrat Gov. Jared Polis and the State of Colorado in an attempt to strike down the new law, The organization filed a Temporary Restraining Order to potentially prevent the law from going into effect, arguing that it is unconstitutional.

RMGO said if people are allowed to vote when they are 18, they should be allowed to purchase a gun.

‘You can be drafted into the military. You can go and die for your country, but you can’t own a gun. That’s just wrong,’ RMGO Executive Director Taylor Rhodes told Fox 21.

State sponsors of the legislation said it is meant to protect young people, not to criminalize responsible gun owners.

‘This isn’t trying to infringe on anybody’s rights … What it comes down to is saving lives, we know that youth suicide has increased,’ Majority House Leader Monica Duran, Majority House Leader told the outlet. ‘We know domestic violence has increased.’

Duran, a Democrat, said limiting access to guns is a way to improve public safety.

‘The easier it is to access something, the more likelihood that it can be used in a way that could be detrimental to not just our youth but our community,’ she said.

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A Texas judge ruled Friday that the abortion ban in the Lone Star State has shown to be too restrictive for women with serious pregnancy complications and that the law must allow exceptions in which doctors would not be concerned about criminal charges.

The ruling by State District Judge Jessica Mangrum is the first to put a dent in Texas’ abortion law since it took effect last year following the Supreme Court’s decision to overturn Roe v. Wade, which allowed states to make their own laws regarding abortions. And supporters of abortion access view the Texas case as a potential model to weaken restrictions in other Republican-led states with abortion bans. 

The challenge is also believed to be the first in the country brought by women who have been denied abortions since the Supreme Court’s decision.

But the injunction was immediately blocked by an appeal to the Texas Supreme Court, according to the state attorney general’s office.

‘The trial court’s injunction is ineffective, and the status quo remains in effect,’ spokesperson Paige Willey said.

Mangrum’s ruling granted a temporary injunction preventing Texas from enforcing the ban against physicians who use ‘good faith judgment’ to terminate a pregnancy that creates a risk of infection or is otherwise unsafe for the woman to continue because of complications.

The injunction also applies to women who have a condition ‘exacerbated by pregnancy’ and cannot be effectively treated during their pregnancy. 

Additionally, the ruling covers instances where the fetus has a condition that makes it unlikely to survive after birth.

‘For the first time in a long time, I cried for joy when I heard the news,’ lead plaintiff Amanda Zurawski said in a statement. ‘This is exactly why we did this. This is why we put ourselves through the pain and the trauma over and over again to share our experiences and the harms caused by these awful laws.’

Mangrum said the injunction would stay in place until the case is completed. A trial for the case is scheduled to begin on March 25.

According to a statement from First Assistant Attorney General Brent Webster, however, the state’s immediate appeal ‘stays an activist Austin judge’s attempt to override Texas abortion laws pending a ruling by the Texas Supreme Court.’

The immediate impact of Friday’s ruling is also unclear after all abortion clinics in the state have closed in the past year.

The judge found that portions of the abortion law violated the rights of pregnant women under the Texas Constitution.

The women challenging the law were determined to have each experienced ’emergent medical conditions’ during pregnancy that put their health or lives at risk and ‘required abortion care.’ They were delayed or denied abortion access because of uncertainty about the possibility of physicians facing criminal charges for providing abortions, the ruling said.

‘Today’s ruling should prevent other Texans from suffering the unthinkable trauma our plaintiffs endured,’ said Nancy Northup, president and CEO of the Center for Reproductive Rights, which helped bring the lawsuit.

Under Texas’ law, doctors who perform abortions could face life in prison and fines of up to $100,000.

The Associated Press contributed to this report.

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In this episode of StockCharts TV‘s The MEM Edge, Mary Ellen reviews what drove the markets lower, as well as key area of support for the broader market indices. She also shares areas that remain positive and why, and provides example stocks.

This video originally premiered August 4, 2023. Click on the above image to watch on our dedicated MEM Edge page on StockCharts TV, or click this link to watch on YouTube.

New episodes of The MEM Edge premiere weekly on Fridays. You can view all previously recorded episodes at this link. You can also receive a 4-week free trial of her MEM Edge Report by clicking the image below.