Technicals for week ending – 19th January 2018.

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 (6-12 months).

Nifty Weekly

Chart 1 Another week, another all time high. Sounding like a broken record LOL !. We are in all time high territory so basic logic and common sense says uptrend intact. The index is still above its 40 week moving average and the slope of the average is also upwards. The number of stocks from the Nifty 500 index that are trading more than 20% off their 52 week highs is just under 13% suggesting broad strength. As for shorter term risks, I am more confident of drawing the support band near 10080-120 but for keeping an eye out, also considering 10500 for now.

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. IT has made a comeback at rank 3 while Auto index has taken a tumble to rank 9.

Chart 4 All indices are above their 40-week MA.

Chart 5 Avg. & Median distance of all sectors from their 52-week closing high is at -2.9% & -1.7%.

Chart 6 FII flows in Index futures segment is flat to positive AND so is client flows !