Long-term index trend & momentum: August 2017

Thursday 24 August 2017

Sector Momentum Update

Updating the short-term momentum model for the week ending 24^th August 2017.

Saturday 19 August 2017

Technicals for week ending – 18th August 2017.

Note : This is not a recommendation and I am not a registered analyst, these are just data points and an assessment of the positives and negatives from a longer term point of view.

Nifty Weekly

Chart 1 Nothing much to add here. 9700-10,100 still remains the broad range. If you look under the surface (2^nd chart below - data not the latest but the trend is clearly visible for now.) the number of Nifty 500 stocks that have fallen more than 20% from their 52 week high has been steadily increasing. On the personal front, I closed some Nifty bees positions this week to balance out the downside risk.

Chart 2 Nifty total returns/10 year Bond index ratio is above its 40-week MA & momentum also favours Nifty index, indicating longer term outperformance for Nifty vs bonds.

Chart 3 Longer term intermarket strength is in Realty & Energy.

Chart 4 Pharma & Media are below their 40-week MA.

Chart 5 Avg. & Median distance of all sectors from their 52 week closing is at -6.5% & -3%.

Chart 6 FII flows in Index futures segment is net long but a declining trend.

Sector Momentum Update

Updating the short-term momentum model for the week ending 18^th August 2017.

Sunday 13 August 2017

Technicals for week ending – 11th August 2017.

Note : This is not a recommendation and I am not a registered analyst, these are just data points and an assessment of the positives and negatives from a longer term point of view.

Nifty Weekly

Chart 1 Had written 9700 as a support but to be honest, did not want a visit to 9700 with such ferocity! As for drawing a resistance, now I can finally mark the 10,050 area as potential resistance. 9900 is also a trouble area if looking at the daily chart. Hence, for a short term (1 month) perspective – will look out for a weekly close below 9700/9650 or inability to move past 9900. Have a look at the 2^nd chart below to see what is going on under the surface.

Chart 2 Pharma & Media are below their 40-week MA.

Chart 3 Nifty total returns-Bond ratio is above its 40-week MA indicating longer term outperformance for Nifty vs bonds.

Chart 4 Longer term intermarket strength is in Realty & Bank-Nifty.

Chart 5 Avg. & Median distance of all sectors from their 52 week closing highs dropped to -8.8% & -4.4%.

Chart 6 FII flows in Index futures segment is net long but a declining trend.

Sector Momentum Update

Updating the short-term momentum model for the week ending 11^th August 2017.

Sunday 6 August 2017

Mid-caps Outperformance over?

NO, I do not mean that Mid-caps will crash BUT relative to the Nifty index looks like the Midcap index might underperform. Below is the chart of the Midcap index divided by the Nifty index – quick recap – a rising ratio means the numerator is outperforming the denominator, reverse for a falling ratio.

The ratio is now below its 40-week moving average. The ratio had a stellar run since 2014 and twice fell below the 40-week MA, this is the third time. Also, the moving average seems to be flattening/rolling over – caution longs. Risk to this view – a upside breakout in the ratio and sustains above the 40-week MA will put long term relative strength back with midcaps.

There is no perfect answer for when to buy/sell BUT in every time period there will always be something that out/under-performs.

Technicals for week ending – 04th August 2017.

Note : This is not a recommendation and I am not a registered analyst, these are just data points and an assessment of the positives and negatives from a longer term point of view.

Nifty Weekly

Chart 1 Nifty is in all-time high territory “and still” no point trying to predict a resistance zone. Immediate support comes in at the 9700 zone. For the purpose of trailing long term exits, well… the 40 week MA is my favourite but it seems far off for now. The range based super trend trailing stop is at 9558 for now. Break of supports as well as super trend would be a warning sign to keep a look out for.