Technicals for week ending – 13th October 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 I was wrong as I thought the Nifty would take a month or so to break the range but it did it in 2 weeks! However was correct on the longer term directional bias as we continue to trade above the rising 40 week moving average. For now, I would still maintain the 9700-support zone for the first warning signs. Let it establish a new range before moving the warning signs higher. In terms of the broader market, looks like the number of stocks more than 20% off their highs have started to cool off. 

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 -4.3% & -1.6%.

Chart 6 FII flows in Index futures segment are positive and rising, clients bought a lot of index puts on Friday.