Saturday, 6 May 2017

Technicals for week ending – 7th May 2017.

Note : This is not a recommendation and I am not a registered analyst, these are just data points and an assessment of the positives and negatives from a longer term point of view.

Nifty Weekly

Chart 1 Nifty support zone for longer time frame comes in at 8900-9000 – which is also a gap zone. Nifty, Bank-Nifty, Mid & Small cap Indices are in all time high territory so no point trying to predict a resistance level here. As of now we are above the 40-week moving average and support zone. The most painful thing for long term holders would be a break of the support zone in quick time.

Chart 2 Nifty & all indices except IT & Pharma are above their 40-week MA.

Chart 3 Nifty-Bond ratio is above its 40-week MA.

Chart 4 Longer term intermarket strength has rotated to Banks & Realty. Metals have lost a lot of relative strength & have dropped in rank quite quickly.


Chart 5 Avg. & Median distance of all sectors from their 52 week closing highs is at -5.2% & -2.8%. Drop mainly caused by Metals, IT & Pharma.

Posted by at

3 comments:

  1. Anonymous12 June 2017 at 12:32

    Hi Karan,

    Could you pls explain how you calculate the Inter market strength chart. Do you take the weekly change in Auto and Infra and then calcualte the ratio and see if its > the ratio of infra/auto 40 week MA?

    Would appreciate your reply. thanks

    ReplyDelete
    Replies
    1. indiasectortechnicals2 July 2017 at 11:46

      Hi
      no I do not see the rate of change.
      lets take the 1st line as an example. the Indices on the left are the numerator and Indices on the top the denominator. the ratio of numerator/denominator if > ratio's 40 wk then numerator is outperforming wrt denominator. If ratio is < then denominator is outperforming

      Now see the 1st line.
      The weekly closing price of Auto divided by Bank is < 40 wk so "N"
      The weekly closing price of Auto divided by Energy is < 40 wk so "N"
      The weekly closing price of Auto divided by FMCG is < 40 wk so "N"

      similarly there will be some "Y". we count the "Y" and the numerator that shows max "Y" is likely to outperform till it in top ranks.

      Delete
    2. indiasectortechnicals2 July 2017 at 11:50

      Relative strength (RS) measures the relationship between two assets. An RS line is calculated by dividing the price of one asset or index by another. A rising RS line means that the numerator is outperforming the denominator i.e. the numerator will gain more than the denominator or it will fall less than the denominator

      Delete

Subscribe to: Post Comments (Atom)