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
**Some charts below use moving
averages. Now, the prices are far below these averages, so we face 2 choices:
Either we wait for price to catch up
to the MA’s – then we might miss out on some solid gains.
Either the MA’s catch up to price –
then we get saved from further losses or a frustrating range bound move.**
Chart 1. I ditched one of the Nifty
strategies, had been thinking for a while that it was making things complicated
for me, plus, it was not adding much benefit to the other Nifty strategy. To
simplify things, I am now just using just 1 strategy applied to 2 different
asset classes – Nifty (for equity) and a 10Y bond fund. Strategy based on Nifty
TRI – is in exit mode and I am in liquid-bees. Bond strategy is still in buy
mode and I am holding a 10Y bond fund. Green line in charts below is up means
buy mode and green line at 0 means exit mode. Portfolio return since 4th
November (go live) is -14% and current drawdown is 16.23% compared to Nifty ETF
return of -20% with a current drawdown of 20%.
Chart 2 Nifty total returns/10 year Bond index ratio is BELOW its 40-week MA &
momentum has shifted to Bonds, both indicating longer term outperformance of Bonds
vs Nifty.
Chart 3 Longer term intermarket strength is in FMCG, IT & Pharma. With Realty
and Media at the bottom.
Chart
4 NONE of the broader indices is above their respective 40-week MA, and only
1 of the sector indices is above its respective 40-week MA.
Chart
5 Avg. & Median distance of all sectors from their 52-week closing high is
around -26% each.
