Technicals for week ending – 25th October 2015.

Nifty weekly

So it has been a good last few weeks for the bulls, but the main downward sloping trend-lines + overcoming the 40 week moving average is still in play. As highlighted last week, for a bullish longer term outlook I am looking for a trend line break on the Nifty & Bank nifty and sustenance above their respective 40 week moving averages. Even the weekly charts of the broader indices such as the CNX 100,200 & 500 show similar patterns – below down trend-line & below 40 week MA. So I am putting the broader indices too on the radar and seems next few weeks will be the decider for the longer term outlook?

Sector Momentum Model Update

Updating our momentum model for the week ending 25^th Oct 2015.

I first wrote about this model here Sector Technical Analysis: Sector Momentum Model

Sector Momentum Model Update

Updating our momentum model for the week ending 18^th Oct 2015.

I first wrote about this model here Sector Technical Analysis: Sector Momentum Model

Number of Indices above/below their 40 week moving average.

(Click chart to enlarge)

Technicals for week ending – 11th October 2015.

Nifty weekly

Looking at the weekly charts, we are near the 8200 hurdle and things get very interesting here : 1^st we have a downtrend line from the all-time highs till the August highs, this also coincides with the 40 week moving average. So this zone is going to be real tough to get past through I believe. Also, there is a similar structure on the Bank-Nifty and banks have the largest weightage in the Nifty. From a longer term trend perspective we are still not out of the woods.

The weekly Nifty/bond ratio is still far below its 40 week MA which indicates a more positive outlook for bonds vis-à-vis Nifty.

On the earnings front we are back at the 100% zone for the Nifty-earnings indexed spread and the nifty PE ratio is back above its + 1 SD.

A break above the downtrend lines plus an improvement in earnings would be the best scenario for the longer term picture. Till then it’s better to sit on the side-lines or reduce exposure here.  

Sector Momentum Model Update

Updating our momentum model for the week ending 11^th Oct 2015.

I first wrote about this model here Sector Technical Analysis: Sector Momentum Model

Sectors ranked by 52 week rate of change

A simple 52 week rate of change momentum filter could have helped one avoid disasters 

Monthly Models

Updated figures for the equity-bond rotation models as of Sep’15 ending.

I first wrote about these here :

Sector Technical Analysis: Buy & Rotate

Sector Technical Analysis: The Simple strategy…

Both the monthly models are still signalling to stay in bonds. The Buy & Rotate model has performed much better this year with a +2.7% return vs -3.1% for the index fund and much lesser drawdown of just -1% compared to -9% for the index fund. On the other side, the 10 SMA model has been lackluster and had some whipsaw’s over the past few months – YTD returns have been in line with index fund performance.

Buy & Rotate model has been in Bonds since 30 April 2015

10 SMA model has been in Bonds since 31 August 2015

Data & charts for Buy & Rotate model : 

Data & charts for 10 SMA model :