Nifty Weekly
Despite the strong move higher
this week there is still a lot of work left to call a longer term uptrend and
we will only get to know in hindsight if this was indeed "the bottom". First up, on
the weekly relative strength charts (http://goo.gl/3MmshX)
the broader indices RS charts are still below their 40-week MA’s but we are
seeing some improvement in sector indices. The defensive sector RS charts
remain above their 40-week MA’s and we are now seeing some improvement in the
RS ratio of laggard sectors such as Energy & Metals. Second, all the major
indices (Sector + Broader) are still below their 40-week MA’s. Lastly, the
Nifty/Bond index has improved but still below its MA’s indicating a preference for
bonds and even the 26-week rate of change between Nifty & bonds is showing
a outperformance for bonds.
On
a shorter timeframe the
Nifty & Bank-Nifty indices are now a tad below resistance zones (upper blue
line). A close above these zones and we could see some more fierce upside
moves.
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