Sector Technicals for the week ending – 12th December 2014.

The below table is just a scan that I run to check the overall trend of an index and its performance vs. the benchmark Nifty. For further information please read the signal description and the detailed sector technical analysis further below. For more information on relative strength please click on the Relative Strength section above.

Nifty Weekly Technical Analysis:

Last week’s call went wrong as I expected a range bound week but the opposite happened!. Going forward – The Nifty is at a critical juncture. The 8150-8200 zone is a key support for the short to medium term. The 14 week RSI has weakened and the MACD is also in sell mode. The VIX inched up to about 14%. In the derivatives space FII’s closed long positions in index futures and call options and increased longs in index put options. To sum it up – FII’s have closed longs and taken a bearish stance via put options and technical indicators are pointing to a downside. However, it would be prudent to doubt the medium term uptrend if and only if it gives a weekly close below 8150. Till then, this dip provides an opportunity to play a short term bounce with a favourable risk-reward ratio with a stop around 8150.

Sector Technicals:

CNX Auto: The Auto index is trading within its price channel. But on a relative basis, the RS line is still signalling strength in the auto space relative to the Nifty. The MACD has flat-lined & momentum is waning – A break below the lower channel would be the first sign of worry.

 

Bank Nifty: The banking index closed in the red but on a relative basis the RS line is signalling strength in the banking space relative to the Nifty. Short term supports are at 18000 while long term supports are place above 16000.  

CNX Pharma: The index is still above the important 11000 zone and the RS line saw an uptick suggesting a flight to defensives. 11000 and 10000 are the important supports.   

CNX FMCG: As mentioned before, the view was positive with a breakout at the 20,000 level. For the second consecutive week the RS line has closed above its 40 week MA with an uptick. Considering these moves in Pharma and FMCG together – this could be a rotation to defensives.

CNX IT: The IT index is still an underperformer vs. the Nifty as its RS line is below its 40 week MA. Price action wise, the index was one of the biggest losers last week. As mentioned last week, its better to avoid any longs in the IT space and a close below the second support one of about 10300 would be bearish.

CNX Infra, Metal, Energy & Realty: All the 4 indices look weak in the short to medium term and on a longer term basis all are trading below their 40 week moving averages. As mentioned previously - it would be prudent to add to positions once these indices close above the 40 week MA of have a positive crossover of a 10 and 40 week MA. Till then, they should be avoided.    

      

CNX Small Cap and Mid cap: The Mid cap index is still outperforming relative to the Nifty but the RS line for the small caps has closed below its 40 week MA. Any break below the 4600 level on the small cap index would be bearish.  

Sector Technicals for the week ending – 5th December 2014.

The below table is just a scan that I run to check the overall trend of an index and its performance vs. the benchmark Nifty. For further information please read the signal description and the detailed sector technical analysis further below. For more information on relative strength please click on the Relative Strength section above.

Nifty Weekly Technical Analysis:

The Nifty looks likely to consolidate around these levels till year end with immediate support around 8500. The 8500 strike put has the highest open interest followed by the 8400 strike while on the call side the highest open interest is in the 8600 strike followed by 8700 suggesting a tight range till the end of the December series. Also, the VIX has closed a tad below 12% which is indicative of this view. In the derivatives space FII’s covered long positions in index futures over the week post the RBI monetary policy meet. So we have a low VIX, closure of longs by FII’s and a tight range as per open interest accumulation – all signs pointing to a tight range, at least for the coming week.

Sector Technicals:

CNX Auto: The Auto index is trading within its price channel. But on a relative basis, the RS line of the auto index made a new high and is still signalling strength in the auto space relative to the Nifty. The MACD has flat-lined & momentum is waning – A break below the lower channel would be the first sign of worry.

 

Bank Nifty: The index closed at lifetime highs and on a relative basis the RS line also made a new high - signalling strength in the banking space relative to the Nifty. Momentum wise the index is in overbought and can stay overbought just like the Auto index did during the start of this year.

CNX Pharma: The index tested its resistance at the re-test zone of its uptrend line. Remaining above the 11000 zone is key to the sustained uptrend in Pharma stocks. 11000 and 10000 are the important supports.   

CNX FMCG: As mentioned before, the view was positive with a breakout at the 20,000 level, but this week the RS line managed to close above a downward sloping 40 week moving average. Will this outperformance last just like it did in the previous years ?.  

CNX IT: The IT index is still an underperformer vs. the Nifty as its RS line is below its 40 week MA. Price action wise, the index closed below supports in the 11,600/ 700 zones. A weekly close above this support zone would be bullish, but till then it’s better not to add to longs in the IT space.

CNX Infra, Metal, Energy & Realty: All the 4 indices look weak in the short to medium term and on a longer term basis – all except Infra are trading below their 40 week moving averages – it would be prudent to add to positions once these indices close above the 40 week MA of have a positive crossover of a 10 and 40 week MA. Till then, they should be avoided.    

       

CNX Small Cap and Mid cap: The Mid cap index closes the at all-time highs and looks setup for more upside. Small caps are still positive as they are trading above an important support zone of 4500-4600 and a weekly closing above 5500 could lead to a sharp rally.  

Sector Technicals for the week ending – 30th November 2014.

This update only has the weekly Nifty technicals, will update the sector indices next week owing to RBI policy.

The below table is just a scan that I run to check the overall trend of an index and its performance vs. the benchmark Nifty. For further information please read the signal description and the detailed sector technical analysis further below. For more information on relative strength please click on the Relative Strength section above.

Nifty Weekly Technical Analysis:

The Nifty again closed the week at all-time highs, major sector indices too are in strong uptrends led by the Bank-Nifty. Intermediate and long term supports are in the zone of 8200 and 7800. Momentum wise the 14 period RSI indicator has entered into the overbought zone and can remain overbought provided that the RBI does not surprise on the downside today. The weekly MACD too has signalled a buy signal which is supportive. In the derivatives space FII’s covered short positions in index futures over the week while in the options space they closed positions across the board. Looks likely that the FII’s have reduced their hedges in the options market and remain long in futures in anticipation of a positive announcement. In the options market the 8700 strike call has the highest open interest suggestive of immediate targets in case of a positive outcome by the RBI. 

Update

Hi All, will be updating the weekly technicals tomorrow. 

Sector Technicals for the week ending – 23rd November 2014.

Sector Technicals for the week ending – 23^rd November 2014.

The below table is just a scan that I run to check the overall trend of an index and its performance vs. the benchmark Nifty. For further information please read the signal description and the detailed sector technical analysis further below. For more information on relative strength please click on the Relative Strength section above.

Nifty Weekly Technical Analysis:

We are back in uncharted territory with a strong weekly close in both the Nifty and Bank-Nifty. The Nifty index closed well above the 8400 zone which it was unable to do so convincingly over the previous 2 weeks. Momentum wise, the RSI indicator is back in the overbought zone and we could see an explosive rally higher (Yeah – the market can remain overbought for extended periods of time !!) and even the MACD is back in the buy mode. Also, many retail accounts are still short in index futures while the FII category continues to increase their net long positions (wondering when the brokers are going to step in and close out the shorts due to margin calls ??). The VIX is still subdued below 14% levels – showing no signs of nervousness as per the options market.  

Sector Technicals:

CNX Auto: The Auto index looks likely to trade within its price channel. But on a relative basis, the RS line of the auto index failed to make a new high and is signalling muted strength in the auto space relative to the Nifty. Also, the MACD has flat-lined which is supportive of the above view.

 

Bank Nifty: The index closed at lifetime highs and on a relative basis the RS line has inched up sharply and we could be setting up for a big rally in banking stocks. Momentum wise the index is in overbought and can stay overbought just like the Auto index did during the start of this year.

CNX Pharma: The index tested its resistance at the re-test zone of its uptrend line. Remaining above the 11000 zone is key to the sustained uptrend in Pharma stocks. 11000 and 10000 are the important supports.   

CNX FMCG: The FMCG index has finally broken-out to the upside, but the index is not likely to outperform the benchmark Nifty as the RS line is still in a downtrend with a downward sloping 40 week moving average.

CNX IT: The IT index is still an underperformer vs. the Nifty as its RS line is below its 40 week MA. Price action wise looks like the index is running into some resistance in the 11,600/ 700 zones.

CNX Infra, Metal, Energy & Realty: Infra and Energy still look positive on a short term basis as they are trading above supports. Metals have run into an important short term resistance zone while Realty has run into resistance around the 220 zone.    

      

CNX Small Cap and Mid cap: The Mid cap index closes the at all-time highs and looks setup for more upside. Small caps are still positive as they are trading above an important support zone of 4500-4600 and a weekly closing below 4600 could lead to a sharp fall with next support zone around 4000.  

Sector Technicals for the week ending – 2nd November 2014.

The below table is just a scan that I run to check the overall trend of an index and its performance vs. the benchmark Nifty. For further information please read the signal description and the detailed sector technical analysis further below. For more information on relative strength please click on the Relative Strength section above.

Nifty Weekly Technical Analysis:

What a week!! I mentioned last week that the break out in Bank-Nifty could lead the Nifty index to all-time highs but did not foresee it happening within a week. Now, the index has broken past its previous highs of 8180 and going forward this should act as the new support zone. We are back in uncharted territory with a strong weekly close in both the Nifty and Bank-Nifty. However, this is a truncated week as we have 2 trading holidays so the coming week could see little price action. On the derivatives side, the VIX is around 13% implying that the options market does not see a volatile November series for now. FII’s increased long positions in the index futures space by about 3,86,000 contracts and we also saw an increase in net longs in the call option space (don’t know why the retailers are trying to pick a top and shorting the index on such a massive breakout !! ). On a longer time frame the 40 week moving average is at 7277 and we have an upward sloping 40 week MA which augurs well.

Sector Technicals:

CNX Auto: The Auto index looks likely to trade within its price channel. But on a relative basis, the RS line of the auto index failed to make a new high and is signalling muted strength in the auto space relative to the Nifty.

 

Bank Nifty: The index closed at lifetime highs and on a relative basis the RS line has inched up sharply and we could be setting up for a big rally in banking stocks. Momentum wise the index is not in overbought, but could enter the overbought range above 70 and could stay overbought just like the Auto index did during the start of this year.

CNX Pharma: The index had broken its uptrend-line shown below and could face resistance at this re-test zone. But if it manages to breakout above the 11000 zone then one could look to increase longs in Pharma stocks.  

CNX FMCG: The FMCG index is not giving any clear signals and it would be better to wait and watch. The FMCG index is not likely to outperform the benchmark Nifty as the RS line is still in a downtrend with a downward sloping 40 week moving average.

CNX IT: The IT index is no longer an outperformer as its RS line is below its 40 week MA. Price action wise – I mentioned last week that the index is back near its supports and can give a tradable bounce from these levels. One can still hold longs in IT space as the index is above crucial supports.

CNX Infra, Metal, Energy & Realty: Infra and Energy still look positive on a short term basis as they are trading above supports. Metals have run into an important short term resistance zone while Realty could trade in a range of 180-220.    

       

CNX Small Cap and Mid cap: The Mid cap index close the week just a tad below its all-time highs but the setup is looking positive for a breakout to the upside. Small caps are still positive as they are trading above an important support zone of 4500-4600 and a weekly closing below 4600 could lead to a sharp fall with next support zone around 4000.