So far this year the Auto index
has been flat and outperformed many other indices in terms of price performance.
Looking at the ratio charts, it looks like the Auto space could be setting up
for its next leg of outperformance.
The Auto/Nifty ratio chart is in
all time high territory and above its 40 week moving average. Even against various indices the Auto/sector
ratio charts are above their 40 week MA’s indicating outperformance against
many indices.
So, the ratio charts are giving
an indication that maybe the Auto space would be an outperformer in the year
2016, although from an absolute returns perspective,
would like to see the Auto index itself sustaining above its 40 week moving
average.
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