Note : This is not a recommendation and I am not a registered analyst,
these are just data points and an asses.ment of the positives and negatives
from a longer term point of view.
Nifty Weekly
Chart 1. For the short term, had
mentioned last week that it looks a bit stretched as we had 2 consecutive
weekly closes above the standard 20/2 Bollinger Bands. Below is the weekly
chart on different timeframes and the 3 week chart looks ominous with that
pinbar action. For now, keeping an eye out on 10500 as short-term support. We
are in all time high territory so basic logic and common sense says uptrend
intact on longer time-frame. The index is still above its rising 40 week moving
average – keeping the trailing stops for now. As for underlying stocks from the
Nifty 500, less than 20% are trading more than 20% of 52 week highs.
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 as per the RS matrix is in IT & Metals.
With Auto and Pharma at the bottom.
Chart
4 All
indices except Pharma are above their 40-week MA.
Chart
5 Avg. & Median distance of all sectors from their 52-week closing high is
at -6.5% & -5.6%.
Chart
6 FII flows in Index futures segment is positive.
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