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. Longer term trend model
based on weekly prices triggered an exit on Friday’s close. It exits when Nifty
spot closes the week below its 40 week moving average. I exited half my
position before the policy announcement and rest after it. Since the price was
way below the exit trigger I sold during market hours, if price would have been
very close to the moving average then I would have acted on Monday morning
based on the final closing. Even though this trade was closed at a tiny profit,
but I gave back a lot in terms of open profit. I am OK with this since this
fall was really fast, looking back at some previous exits – they were slow and
took time so cant extrapolate that every exit would be like this. You win some,
you lose some. On the intermarket signals- easy guess – Nifty TRI is below the
40 week MA & Bond TRI is above its MA. Past instances show tough times
during this signal.
Chart 2 Nifty total returns/10 year Bond index ratio is BELOW its 40-week MA &
momentum also now favours Bond index, indicating longer term outperformance for
bonds vs Nifty.
Chart 3 Longer term intermarket strength as per the RS matrix is in IT, Pharma
& FMCG. With Realty and Media at the bottom.
Chart
4 Damage in other indices as most are below their respective 40-week
MA.
Chart
5 Avg. & Median distance of all sectors from their 52-week closing high is
at -20.3% & -17.2%.
Chart
6 CLI flows in Index futures segment is positive and been holding positive for
few months now.
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