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October 6, 2024

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On the back of one of the major FII selloffs seen in recent times, the markets succumbed to strong corrective pressure through the week and ended on a very weak note. The Nifty 50 remained under selling pressure; at no point in time did it show any intention to stage a technical pullback. While the weakness persisted in all five trading sessions, the trading range also got wider, with the Nifty oscillating in an 1167-point range over the past five days. There was a resultant rise in the volatility as well; the IndiaVIX surged by 18.10% to 14.13 on a week-on-week basis. The benchmark Nifty 50 closed with a deep weekly cut of 1164.35 points (-4.45%).

We have evident reasons, like the money flowing out of the Indian markets to the Chinese markets, geopolitical tensions in the Middle East, and SEBI announcing changes in the derivatives trading landscape, to write about when we talk and assign reasons for market declines. However, we also need to take a deeper look at the technical perspective. The Nifty was highly deviated from its mean; at one point in time, the index was trading almost 10% above its 50-week MA. So even the slightest reversion could have seen violent retracements from higher levels. Despite the kind of fall we have seen over the past few days, the Nifty has not even tested the nearest 20-Week MA, which currently stands at 24441. This speaks a lot about the extent to which the markets had run up much ahead of their curve.

The derivatives data suggest that the market may attempt to find support at the 25,000 level. Besides being a psychologically important level, 25,000 strikes not only hold the highest PUT OI as of now, but has a very negligible existence of Call OI. So, even if we continue with an overall downtrend, some minor technical rebound from the current level cannot be ruled out. By and large, a stable start is expected for the week, and the levels of 25300 and 25450 shall act as resistance. The supports are expected to come in at 24910 and 24600.

The weekly RSI is 59.70; it has crossed under 70 from an overbought zone, which is bearish. It remains neutral and does not show any divergence against the price. The weekly MACD looks like it’s being on the verge of a negative crossover, as evidenced by a narrowing Histogram. A large bearish candle that emerged hints at the kind of strong selling pressure that was witnessed throughout the week.

The pattern analysis shows that despite the kind of decline that we have seen, the primary trend is still intact. On the daily chart, we have tested the 50-DMA; on the weekly chart, we have not even tested the nearest 20-Week MA. So long as we are above the 24000-24400 zone, there is little chance of the primary uptrend getting disrupted.

All in all, from a short-term technical lens, the behavior of Nifty vis-à-vis the levels of 25000 would be very crucial to watch. If the Nifty has to find some ground and put a base for itself in place, it will have to keep its head above the 25000 level. Any violation of this level on a closing basis would invite more weakness for the index. Then, the levels of 20-week MA may get tested over the coming days. While navigating this turbulent phase, it is recommended that we cut down on highly leveraged positions and stay invested in low-beta defensive pockets. Though it’s important to stay mindful when managing risks, a highly cautious approach 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.

Relative Rotation Graphs (RRG) show Nifty IT, Pharma, Consumption, Services Sector, and FMCG indices are inside the leading quadrant. However, a couple of them are showing some paring of their relative momentum. However, broadly speaking, these groups may show some resilience and may relatively outperform the broader markets.

The Nifty Midcap 100 Index has rolled inside the weakening quadrant. Besides this, the Nifty Auto is also inside the weakening quadrant and can be seen rolling towards the lagging quadrant.

The Nifty PSE Index has rolled inside the lagging quadrant. Along with the Infrastructure Index which is also inside the lagging quadrant, it is set to relatively underperform the broader markets. The Nifty Bank, Energy, Realty, Metal, PSU Bank, Financial Services, and Commodities Index are also inside the lagging quadrant. However, they all are seen improving their relative momentum against the broader Nifty 500 index.

The Nifty Media Index is the only one inside the improving quadrant; however, it is seen rapidly giving up on its relative momentum 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

Glance up while strolling through parts of downtown Hong Kong and, chances are, you’ll notice the glassy black lens of a surveillance camera trained on the city’s crowded streets.

And that sight will become more common in the coming years, as the city’s police pursue an ambitious campaign to install thousands of cameras to elevate their surveillance capabilities.

Though it consistently ranks among the world’s safest big cities, police in the Asian financial hub say the new cameras are needed to fight crime – and have raised the possibility of equipping them with powerful facial recognition and artificial intelligence tools.

That’s sparked alarm among some experts who see it as taking Hong Kong one step closer to the pervasive surveillance systems of mainland China, warning of the technology’s repressive potential.

Hong Kong police had previously set a target of installing 2,000 new surveillance cameras this year, and potentially more than that each subsequent year. The force plans to eventually introduce facial recognition to these cameras, security chief Chris Tang told local media in July – adding that police could use AI in the future to track down suspects.

Tang and the Hong Kong police have repeatedly pointed to other jurisdictions, including Western democracies, that also make wide use of surveillance cameras for law enforcement. For instance, Singapore has 90,000 cameras and the United Kingdom has more than seven million, Tang told local newspaper Sing Tao Daily in June.

And, some critics say, what sets Hong Kong apart from other places is its political environment – which has seen an ongoing crackdown on political dissent, as it draws closer to authoritarian mainland China.

Following unprecedented and often violent anti-government protests that rocked the city in 2019, local and central authorities imposed sweeping national security laws that have been used to jail activists, journalists and political opponents, and target civil society groups and outspoken media outlets.

Hong Kong’s leaders have said the laws are needed to restore stability after the protests in the nominally semi-autonomous city, and argue their legislation is similar to other national security laws around the world.

“The difference is how the technology is being used,” said Samantha Hoffman, a nonresident fellow at the National Bureau of Asian Research who has studied China’s use of technology for security and propaganda.

Places like the United States and the UK may have problems with how they implement that technology, too – but “this is fundamentally different… It has to do specifically with the system of government, as well as the way that the party state… uses the law to maintain its own power,” said Hoffman.

What this means for Hong Kong

Hong Kong has more than 54,500 public CCTV cameras used by government bodies – about seven cameras per 1,000 people, according to an estimate by Comparitech, a UK-based technology research firm.

That puts it about on par with New York City and still far behind London (13 per 1,000 people), but nowhere near mainland Chinese cities, which average about 440 cameras per 1,000 people.

Fears of mainland-style surveillance and policing caused notable angst during the 2019 protests, which broadened to encompass many Hong Kongers’ fears that the central Chinese government would encroach on the city’s limited autonomy.

Protesters on the streets covered their faces with masks and goggles to prevent identification, at times smashing or covering security cameras. At one point, they tore down a “smart” lamp post, even though Hong Kong authorities said it was only meant to collect data on traffic, weather and pollution.

At the time, activist and student leader Joshua Wong – who is now in prison on charges related to his activism and national security – said, “Can the Hong Kong government ensure that they will never install facial recognition tactics into the smart lamp post? … They can’t promise it and they won’t because of the pressure from Beijing.”

Across the border, the model of surveillance that protesters feared is ubiquitous – with China often celebrating the various achievements of its real-time facial recognition algorithms, and exporting surveillance technology to countries around the world.

According to an analysis by Comparitec, eight of the top 10 most surveilled cities in the world per capita are in China, where facial recognition is an inescapable part of daily life – from the facial scans required to register a new phone number, to facial recognition gates in some subway stations.

During the Covid-19 pandemic, the government mandated a QR “health code” to track people’s health status, which in some places required facial scans.

But the technology has also been used in more repressive ways.

In the far-western region of Xinjiang, Beijing has used cameras to monitor members of the Muslim-majority Uyghur population. And when unprecedented nationwide protests broke out in late 2022 against the government’s strict Covid policies, police used facial recognition along with other sophisticated surveillance tools to track down protesters, The New York Times found.

“(China’s) public security surveillance systems … tend to track lists of particular people, maybe people with a history of mental illness or participation in protests, and make a note of people who are marked as being troublesome in some way,” Hoffman said.

The systems then “track those specific people across the city and across its surveillance network.”

“I think it’s fair to anticipate that the use of CCTV and facial recognition technology in Hong Kong will begin to look a lot like those in mainland China over time,” she said.

Hong Kong police have argued the cameras help fight crime, pointing to a pilot program earlier this year of 15 cameras installed in one district. Already, those cameras have provided evidence and clues for at least six crimes, Tang told Sing Tao Daily – and police will prioritize high-risk or high-crime areas for the remaining cameras.

The first five months of this year saw 3% more crimes than the same period last year, Sing Tao reported.

When considering AI-equipped cameras, “the police will definitely comply with relevant laws,” the force added.

Steve Tsang, director of the SOAS China Institute at the University of London, warned that the new cameras could be “used for political repression” if they are employed under the “draconian” national security law.

Unless authorities assure the public that the cameras won’t be used for that purpose, “this is likely to be a further step in making Hong Kong law enforcement closer to how it is done on the Chinese mainland,” he said.

How to regulate facial recognition

Other experts argued it’s far too soon to say what the impact will be in Hong Kong, since authorities have not laid out in detail how they would use the technology.

“Hong Kong law doesn’t, in all measures, mirror what happens in mainland China,” said Normann Witzleb, an associate professor in data protection and privacy at the Chinese University of Hong Kong,

But that’s why it’s all the more important for authorities to address a raft of yet-unanswered questions, he said.

For instance, it remains unclear whether Hong Kong will deploy live facial recognition that constantly scans the environment, or whether the tech will only be applied to past footage when certain crimes occur or when legal authorization is granted.

Witzleb also raised the question of who would have the power to authorize the use of facial recognition, and what situations may warrant it. Would it be used to prosecute crime and locate suspects, for example – or for other public safety measures like identifying missing people?

And, Witzleb added, will police run the technology through their existing image databases, or use it more broadly with images held by other public authorities, or even publicly available imagery of anyone?

“It’s important to design guidelines for those systems that take proper recognition of the potential benefits that they have, but that also acknowledge they’re not foolproof, and that they have the potential to interfere with (people’s) rights in serious ways,” Witzleb said.

Regardless of how facial recognition might be used, both Hoffman and Witzleb said the presence of that technology and the increased number of security cameras may make Hong Kongers feel less free under the ever-watchful eye of the police.

“When you feel like you’re being monitored, that affects your behavior and your feelings of freedom as well,” Hoffman said. “I think that there’s an element of state coercion that doesn’t need to have to do with the effectiveness of the technology itself.”

This post appeared first on cnn.com

Scorch marks and bullet holes scar the battered walls of the Haran family home in kibbutz Be’eri. Its tiled roof has caved in, windows smashed, littering the floors with sharp shards of terracotta and glass – the debris, still untouched, of a day of horror for Israel.

“This house tells the story of Be’eri,” says Yarden Tzemach, a farmer and surviving resident of the kibbutz, one of the Israeli communities near Gaza that was overrun by Hamas militants last year.

“In this house, people were murdered. A family, including three children, were kidnapped from here,” he says.

Outside, beneath the fruit trees in the back yard, a toddler’s ride-on toy car, adorned with stickers of Winnie the Pooh, sits amid the rubble, a stark reminder of the lives shattered here.

In some neighborhoods of Be’eri, barely a building was left intact. More than 100 of its 1,100 residents were killed and another 30 abducted to Gaza on October 7.

Home after home was burned out or reduced to rubble and – a year on – many remain as poignant monuments to an ongoing trauma. At least 10 residents of the kibbutz, all friends and neighbors of each other, are among the more than 100 Israelis believed to still be held hostage.

Progress on a ceasefire and hostage deal between Israel and Hamas has repeatedly fallen apart to the anger and despair of hostage families.

‘Best recovery is coming home

In the main administration building of Be’eri, two large aerial photographs hang side by side near the entrance. One is an image of the kibbutz from April 2023, showing ordered rows of neat, white buildings set in lush gardens. The other, taken just after the October 7 attack, shows the same homes blackened and destroyed in the militants’ rampage.

“They killed my sister over there,” says Amit Solvy, pointing to a house on the map, five rows in from the fence that runs around the kibbutz.

Elsewhere in the administration building, two posters are taped in a window – one showing the names and faces of the kibbutz residents who were killed, and another listing those who are held hostage.

Solvy, the Be’eri finance chairman, himself an Israeli veteran of the 1973 Arab-Israeli War, is one of nearly 100 residents to have so far returned. Despite his personal loss, he came back to his house three months ago and is now helping lead efforts to bring kibbutz Be’eri, formerly a self-sustaining farming community, back to life.

“I said to all the people that the best recovery is coming home. This is the best emotional recovery, in my opinion,” says Solvy.

But he acknowledges not everyone feels the same, estimating that up to 15% of the surviving residents of Be’eri may never return because of the trauma and the memories of October 7.

And many of those who want to come back, he says, are unable to do so until the extensive damage has been repaired and homes rebuilt – a massive renovation project that means it will be at least 2 years, according to Solvy, before the majority of residents can return home.

“There is no infrastructure for kids, there are no schools, so people with families cannot come back yet,” he explains.

‘There were terrorists in my house’

Work on the physical scars has already begun, with heavy machinery breaking ground on a new neighborhood of Be’eri. New homes, untouched by the October 7 attack, are seen as an essential means of attracting the majority of the residents back.

Ayelet Hakim, her husband and their son, 12, and daughter, 5, live alongside many other Be’eri survivors in government-supplied temporary housing in another kibbutz, Hatzerim, an hour’s drive from the horrifying memories of what was their home.

“I sat in my safe room there for hours and hours not knowing what was going on, and feeling my life being threatened, my kid’s life being threatened, because there were terrorists in my house,” she adds.

Her son, Yehonatan, interrupts. “I want to go back to Be’eri, back to the house that I was living in. I don’t care about the trauma,” he pleads.

“The house, no. The kibbutz, yes,” asserts Ayelet.

“Kibbutz Be’eri has been my home for the past 56 years. That’s where I want to live,” she says.

But after so much death and destruction in Be’eri, a community so close to Gaza, much must also be done to reassure residents they’ll be safe.

In July, an Israel Defense Forces internal investigation into the events of October 7 concluded that the Israeli military had “failed in its mission to protect the residents” and was ill-prepared for the mass Hamas attack.

“I believe it will be possible. But it will be a big challenge and will take a long time for people to feel as safe as they felt before October 7,” says Tzemach, back at the ruins of his Be’eri neighborhood.

“You know, once something happens, you always have in the back of your mind that it can happen again.”

This post appeared first on cnn.com

Israel’s military says it has encircled Jabalya, northern Gaza and launched a new ground operation, after seeing signs of Hamas rebuilding, despite nearly a year of fighting and strikes in the territory.

Despite attention shifting to Lebanon after Israeli forces escalated their attacks on the Hezbollah militant group, Israel continues to operate across Gaza and is again focusing on an area it previously said was rid of Hamas.

Elsewhere in Gaza, at least 25 people are confirmed dead after Israeli airstrikes hit a mosque and a school in the center of the territory, hospital officials say. Israel said Hamas was embedded in both buildings.

Israel carried out airstrikes overnight Saturday into Sunday in northern Gaza including against what the military said were “weapons storage facilities, underground infrastructure sites, terrorist cells, and additional military infrastructure sites.”

In a statement, the military said it had detected the presence of Hamas members there, as well as efforts by them “to rebuild its operational capabilities in the area,” and was moving forward with the operation to “dismantle.”

Hamas’s military wing, Al-Qassam Brigades, said it was engaged in “fierce fights” with Israeli forces in northern Gaza.

Dozens of families in the area have packed up their belongings and fled once again after warnings from the Israeli military of the fresh ground operation in Jabalya, which is home to Gaza’s biggest refugee camp.

The Israeli military issued a fresh evacuation order for residents in northern Gaza, adding it had expanded the scope of the “humanitarian area” in Al-Mawasi.

“We heard the sounds of explosions all night long as if the war started today,” Asaf said

Some residents of northern Gaza are refusing to move, saying there is no safe place left in the enclave.

Jabalya is home to Palestinians who have been displaced multiple times during the Israel-Gaza conflict. The camp has already been targeted by the Israel Defense Forces (IDF) several times during the war.

In the separate incident in southern Gaza, a mosque was targeted by Israeli forces early Sunday, killing at least 21 people, while another strike on a school killed four people, hospital officials said,

“The mosque was a shelter for displaced people, there are no militants or anything inside,” said Nabil Nadda, who was nearby when the strike happened. “Just people who have no shelter, tents, or homes so they sheltered in the mosque.”

The Israeli military confirmed it carrying out strikes on both sites, calling them “precise” and said were targeting Hamas “command and control” centers.

The renewed fighting comes on the eve of the anniversary of the October 7 attacks, which saw Hamas kill around 1,200 people in Israel and seize more than 250 hostages.

The Israeli offensive that followed in Gaza – which Israel says is aimed at destroying Hamas – has killed more than 41,000 people and triggered a humanitarian crisis.

This post appeared first on cnn.com

S&P 500 and Nasdaq: New support and targets on Friday

  • This week has not been kind to the S&P 500 index
  • The value of the Nasdaq index retreated to the 19614.1 support level on Tuesday

S&P 500 chart analysis

This week has not been kind to the S&P 500 index. On Tuesday, we had a strong bearish consolidation; on Wednesday, we formed a new weekly low at the 5673.1 level. From then until now, we see a sideways movement of the index in the 5675.0-2720.0 range. Additional pressure in the upper zone makes the EMA 200 moving average. Today’s picture has slight positive indications as support has risen to the 5695.0 level.

Expectations are growing that the S&P 500 has enough strength to jump over the EMA 200 and continue towards the weekly open zone around 5730.0. If we succeed in this, the optimism for the continuation to the bullish side grows. Potential higher targets are 5740.0 and 5750.0 levels. For a bearish option, we need a negative consolidation and a pullback of the index below the 5680.0 level. With those steps, we will put pressure on the support zone, and we need a break below to confirm the bearish scenario. Potential lower targets are 5670.0 and 5660.0 levels.

 

Nasdaq chart analysis

The value of the Nasdaq index retreated to the 19614.1 support level on Tuesday. After that, the index starts the initial consolidation in the 19650.0-19850.0 range. During this morning’s Asian session, we moved close to the upper line of the current range, and there we encounter the EMA 200 moving average. To continue on the bullish side, we need an impulse above at least the 19900.0 level.

That should be plenty of room for the Nasdaq to consolidate above the EMA 200 and continue to rise. Potential higher targets are 19950.0 and 20000.0 levels. For a bearish option, we need a negative consolidation and pullback down to the 19650.0 support level. This puts pressure on this week’s support zone. New pressure could easily push the Nasdaq to a new low and thus confirm the move to the bearish side. Potential lower targets are 19600.0 and 19550.0 levels.

 

The post S&P 500 and Nasdaq: New support and targets on Friday appeared first on FinanceBrokerage.