Long-term index trend & momentum: January 2016

Monday 25 January 2016

Technicals for week ending – 24th January 2016.

Nifty Weekly

The primary longer term trend still remains down for me as the Nifty index is below its 40 week moving average. On the weekly charts, the Nifty broke its support and closed below the blue shaded region for 2 weeks in a row now. Similar pattern was seen on the Bank Nifty which has the highest weightage in the Nifty index. For a longer term bull trend would like to see these indices trading above their 40 week moving average and above the downward sloping trend-line. The Nifty/Bond ratio deteriorated further this week and has been signalling that bonds would be a better performer since 2015.

On a short term time frame the VIX projected 30 sessions range is suggesting that the Nifty index could see a bounce in this week. As per the weekly charts the first resistance comes in around the lower blue shaded area i.e. 7600 levels. A weekly close above that could mean a quick run up to the next resistance zone around 7950.

Sunday 24 January 2016

Sector Momentum Model Update

Updating our momentum model for the week ending 24^th Jan 2016.

I first wrote about this model here Sector Technical Analysis: Sector Momentum Model

Monday 18 January 2016

Technicals for week ending – 17th January 2016.

Nifty Weekly

The primary longer term trend still remains down for me as the Nifty index is below its 40 week moving average. On the weekly charts, the Nifty broke its support and closed below the blue shaded region. Similar pattern was seen on the Bank Nifty which has the highest weightage in the Nifty index. For a longer term bull trend would like to see these indices trading above their 40 week moving average and above the downward sloping trend-line.

The Nifty/Bond ratio deteriorated further this week and has been signalling that bonds would be a better performer since 2015. As per the ratio charts the weekly FMCG/Nifty ratio has started inching up and its 40 week moving average is also looking up – this is indicating a rotation towards the defensive FMCG names for relative outperformance.

Sector Momentum Model Update

Updating our momentum model for the week ending 17^th Jan 2016.

I first wrote about this model here Sector Technical Analysis: Sector Momentum Model

Monday 11 January 2016

Technicals for week ending – 10th January 2016.

Nifty Weekly

The primary longer term trend still remains down for me as the Nifty index is below its 40 week moving average. Although on the weekly charts we are near supports that were mentioned in the last weekly in December and we got a good bounce from there. This time though, going as per the SGX the Nifty is likely to open below this support zone. Since this is a weekly chart it is important to see if we get a Friday close above or below this support zone, which can set the tone for the shorter term.

There is a similar structure in the Bank-nifty & broader indices of Nifty 100,200 & 500 & the Nifty/Bond ratio has been telling us that bonds would be a better performer than Nifty since April 2015…..and now this ratio has fallen below 18 and is back to the levels seen before the election rally.

Sector Momentum Model Update

Updating our momentum model for the week ending 10^th Jan 2016.

I first wrote about this model here Sector Technical Analysis: Sector Momentum Model

Monday 4 January 2016

Another look at Volatility

In the previous post Sector Technical Analysis: Volatility - not over yet ? we looked at the 20 week Bollinger bandwidth reading of the Nifty index and determined that volatility is not over and could soon show its ugly head and it did. Now again the Nifty 20 week Bollinger Bandwidth is below 10% but this time let us compare it with its broader indices such as Nifty 100,200 & 500.

In a more than 10 year history this has rarely occurred but when it did, we saw some explosive moves either side. However this is not to be seen from 1 data point and this phenomenon could last a few more weeks as it did in Feb-Mar 2014. Looks like the market could frustrate everyone in the coming few weeks and then show its direction.