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 STILL Nothing much to add
here. 9700-10,100 remains the broad range and we closed the week above 9700. As
mentioned last week, the Bollinger bandwidth contracted further – my sense is
it might take a month or two for it to rise and for Nifty to break the range.
On longer term basis I am biased towards the long side as we are above a rising
40 week moving average. First signs of worry will be a break of 9700 – we have
now had two fast and violent moves towards 9700. Also, keep an eye on stocks
trading more than 20% off their 52 week highs (chart below)
Chart 2 Nifty total returns/10 year Bond index ratio is above its 40-week MA &
momentum also favours Nifty index, indicating longer term outperformance for
Nifty vs bonds.
Chart 3 Longer term intermarket strength as per the RS matrix is in Realty & Metals.
They are a bit slow to signal so keep in mind the general conditions.
Chart
4 Pharma
&Media indices are below their 40-week MA.
Chart
5 Avg. & Median distance of all sectors from their 52-week closing high is
at -7.3% & -4.8%.
