Metals Index –Underperform ?
Latest data set suggests that the
Metals Index could see lacklustre performance compared to other sectoral
indices. Not doing anything different, just following the process like we did
for the previous write ups done below –
Process: We are just dividing each sector index by one another and
applying a moving average filter to check if the numerator is outperforming or
underperforming. So, in this case just like the one’s above, the Metals Index
is divided by all sector indices and if the ratio is above the 40-week moving
average then the Metals index is outperforming and when the ratio charts are above or below the moving average filter
against majority of Indices then that becomes very important as it is
signalling a shift in sector preferences.
This is just a probability thing
and if the ratio’s start to improve then obviously, that will signal a change
and the Metals Index will be back in favour.
Anyways, below are the ratio
charts and you can see that the Metals/sector ratios are below their respective
moving average filter for all except the Metals/Pharma & Metals/IT ratios
as Pharma & IT have been falling for long.
Do keep in mind that since these
are weekly charts & data so this is analysis is more longer term oriented.
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