Technically Speaking, the Dow Jones(DJ) has created a lower low lower high price formation on the daily chart. The drought in Europe and China is worsening the food inflation further. The chances of another rate hike have increased. The US markets ended the week with a dip red candle on Friday. One should keep stopping above 3620 and sell the persistent future for the target of the recent low. Whereas, on the higher side 3620 should work as strong resistance. On the downside, levels of 3106 will act as support. The REC with Nifty is also indicating bearishness.
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The RSI (Relative Strength Index) is quoting 39.90 levels and it is below EMA. Both of these moving averages have converged and are ready to get diverge in the coming few days. The slop of 50 EMA has flattish and 20 EMA is started sloping downwards. While moving downwards it has given a death cross in 50 and 20 EMA. After that, it is resuming a downward trend. Persistent managed to retrace only 38.20% of the last downside move from the top of 4954 in May 2022. However, the bullish view will be negated if the price closes below the support level of 2230. Hence, based on the above technical structure one can initiate a long position in AAVAS at CMP 2272, or a fall in the price to 2280 levels can be used as buying opportunity for the upside target of 2475. Furthermore, the RSI (14) indicator has also sustained above 50 levels & an oscillator Stochastic RSI is also supportive for the long position with positive crossover.
Moreover, after a breakout of Falling Wedge, the price has been consolidating & builds up just below the 50 Exponential Moving Averages, which indicates bullish strength in AAVAS. In addition, in the second week of July, the price has given a breakout of the Falling Wedge pattern and shifted above last month’s highs, which indicates the price has made a strong base successfully and is ready for an up move.
![50 ema cross 200 ema 50 ema cross 200 ema](https://i1.wp.com/www.dolphintrader.com/wp-content/uploads/2019/10/200-EMA-Crossover-Forex-System.png)
On a weekly chart, the stock has witnessed a sharp up move and the price has made a high of 3340 in the last week of January 2022 and then stock traded in lower highs and lower lows formation till 61.8 % Fibonacci Retracement level, which indicates healthy correction. Trading ideas AAVAS (Aavas Financiers Ltd.): Buy F&O expiry outlook September 1: If Nifty breaks 17350, long unwinding may pull index lower, caution advisedĪlso Read: Nifty must hold above 17550 for an upmove towards 17667-17777 levels Buy these two stocks to pocket gains