Nifty, Monthly - Although it looks like things are all bleak with no respite, I feel Nifty is in a bullish flag formation in the long-term. Should take support on the 20-month MA, if it doesn’t or bounces and corrects in a month or two, it could take support on the lower trendline around 16500 levels and move from there. If it works, second half of this year could see a run towards 19k
Fundamentals as well point to it, although inflation hasn’t eased yet, its only a matter of time.
Brent, monthly
Brent peaked in May '22 at $120 levels. What got me back into the market was crude breaking the $100 barrier in first week of July '22. Since then, lower base months have kept inflation high. Brent is without a doubt a large contributor to inflation though the stickiness of it has other contributors like insane wage growth seen last year and sentiment. The differential YoY in absolute dollar terms is going to be high from this month onward, where Mar '22 Brent was $110 levels whereas we are averaging below $80 in current month. The differential, clubbed with poor sentiment, should tame inflation
From doing too little in '21 saying inflation is transitory, its quite possible the fed has done a bit too much this time to compensate. With the financial stability in the US in question, its highly likely fed will ease on the hikes citing lower inflation 2-3 months from now.
Disc: Staying invested