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

Sector Technicals for the week ending – 12^th October 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 7850 support zone looks likely to be breached in the near term as the MACD sell trigger seems to be an overhang and other major sectors saw their supports breaking in the last week. Also, if the index closes below 7850 for the week then this could be a failed breakout and could see a fast downward move in the coming weeks. In the derivatives space, FII’s continue to be net long in index futures and but have decreased their net longs over the previous week while simultaneously increasing their long positions in put options  suggesting some expectations of downside. Though the India VIX is at 14.33% the CBOE VIX closed at a little over 21% which is surprising as most of the time the India VIX has trader higher than the CBOE VIX.

Sector Technicals:

CNX Auto: As you can see the Auto index has traded within a price channel since the start of the year and last week closed at the lows of that channel. Any closing below this channel could lead to a fast sell-off to supports near 7200-7300.

 

Bank Nifty: 15500-15600 did not hold on a weekly closing basis and this could be a potential failed breakout. A failed breakout along with a sell signal by the MACD does not bode well for the Banking index. Once could sell on rallies till we do not manage to close above 15600.

CNX Pharma: The uptrend seems to have broken as per the trend-line shown below. A weekly close below 10000 would induce further weakness.

CNX FMCG: The FMCG index could not sustain above prior resistance and a weekly close below 19,000 would endanger the short term uptrend.  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 in an uptrend and momentum readings favour the bulls as it is in the overbought zone and with no overhead resistance. The uptrend is intact as long as long as it trades above the 10400-10500 zone. The index has outperformed the benchmark over the last few weeks, and is an outperformer as its RS line is trading above its 40 week moving average.

CNX Infra, Metal, Energy & Realty: Infra and Energy look still look positive on a short term basis as they are trading above supports. Realty and Metals look the weakest as they are at/below important supports and most important – they are trading below their respective 40 week moving average.   

      

CNX Small Cap and Mid cap: The Mid cap index outperformed last week but did not hold critical supports of 11400-11500. The next support zone lies around 11000 and then 10500. 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.