Sector Technicals for the week ending – 11th January 2015

The below table is just a scan that I run to check the overall trend of an index and its performance vs. the benchmark Nifty. For further information please read the signal description and the detailed sector technical analysis further below. For more information on relative strength please click on the Relative Strength section above.

Nifty Weekly Technical Analysis:

Even a 3% loss during the week failed to break the lower price channel as shown below and mentioned in previous weeks. Also, the 8150-8200 zones acted as a major support on a weekly closing basis, yet again. Technically, the MACD and the 14 week RSI indicators are pointing to waning price momentum in the Nifty. However, it would be prudent to call for a trend change only once the price channel is broken to the downside along with a weekly close below 8150. The VIX closed at above 15% level which is not alarming. In the past a weekly closing above 20% has led to some turbulence in the Nifty. Hence, a weekly close above 20% on the VIX along with a close below its lower channel would be the first warning for a trend change on the Nifty. On the flows front, despite a huge closure of longs, we did not see any build-up of shorts from FII’s – which is a positive.

  

Sector Technicals:

CNX Auto: The Auto is trading below its lower price channel which was the first sign of caution for the Auto Bulls. On a relative basis, the RS line is still signalling strength in the auto space relative to the Nifty as long as the RS line is above its 40 week MA. The MACD is in sell mode and the index is trading below is lower price channel - one can look out to book profits/ reduce exposure to Auto stocks at this juncture. 8000 looks to be a good medium term support and a move back above the lower price channel would be a medium-long term positive.

 

Bank Nifty: Despite the sell off the banking index held supports and also on a relative basis the RS line is signalling strength in the banking space relative to the Nifty. One can look to increase long exposure in the banking space at these levels. Important supports are at 18000 while long term supports are placed above 16000. 

CNX Pharma: As mentioned last week, the index is trading below its uptrend line and resistance of 11000. 11000 seems to be a key resistance zone and it would be prudent to lighten up on Pharma longs. With the MACD in sell mode looks likely that the Pharma index is going to trade in a range of 10000-11000. A break below 10000 would signal a trend change to the downside for the medium term.     

CNX FMCG: The view is still positive with a breakout at the 20,000 level. However, the FMCG space might be a relative outperformer as its RS line is back above its 40 week MA. It would be prudent to wait and see if the RS line can close above its 40 week MA for the next 2-3 weeks so that one can increase longs in this space.

CNX IT: Price action wise, the IT index looks likely to trade in a range of 10300 to 11800. A weekly close above the 11800 mark should be seen as a sign of strength and one can look to add to longs in the IT space.

CNX Infra, Metal, Energy & Realty: All the 4 indices look range-bound to negative in the short to medium term. On a longer term basis all are trading below their 40 week moving average. As mentioned previously - it would be prudent to add to positions once these indices close above the 40 week MA or have a positive crossover of a 10 and 40 week MA. Till then, they should be avoided.  

  

      

CNX Small Cap and Mid cap: The Mid cap index is still outperforming relative to the Nifty but the RS line for the small caps has closed above its 40 week MA and the Small cap index looks setup for a break-out to the upside after a long period of consolidation. Any break above the 5500 level on the small cap index would be bullish.  

Sector Technicals for the week ending – 4th January 2015

The below table is just a scan that I run to check the overall trend of an index and its performance vs. the benchmark Nifty. For further information please read the signal description and the detailed sector technical analysis further below. For more information on relative strength please click on the Relative Strength section above.

Nifty Weekly Technical Analysis:

As mentioned before, the 8150-8200 zone is a key support for the short to medium term and the index managed to close well above 8300 and seems to be trading in the price channel as shown below. The 14 week RSI is well below overbought. However, the MACD is in sell mode. The VIX is still at about 14%. In the derivatives space FII’s increased long positions in index futures and in index put options suggesting some hedging of long positions. To sum it up – Indicators are showing weakness/ pause but price performance wise the Nifty looks positive as long as it trades above the lower channel, also in terms of flows the FII positions are still on the long side suggesting a positive bias.

Sector Technicals:

CNX Auto: The Auto index broke below its lower price channel which should be the first sign of caution for the Auto Bulls. On a relative basis, the RS line is still signalling strength in the auto space relative to the Nifty as long as the RS line is above its 40 week MA. The MACD is in sell mode and the index is trading below is lower price channel. One can look out to book profits/ reduce exposure to Auto stocks at this juncture. A move back above the lower price channel would be a medium-long term positive.

 

Bank Nifty: The banking index closed at an all-time high and also on a relative basis the RS line is signalling strength in the banking space relative to the Nifty. Important supports are at 18000 while long term supports are place above 16000.  

CNX Pharma: The index is trading below its uptrend line and resistance of 11000. With the MACD in sell mode looks likely that the Pharma index is going to trade in a range of 10000-11000.  

  

CNX FMCG: The view is positive with a breakout at the 20,000 level. However, the FMCG space might be a relative underperformer as its RS line is back below its 40 week MA.

  

CNX IT: The IT index is still an underperformer vs. the Nifty as its RS line is below its 40 week MA. Price action wise, the index looks likely to trade in a range of 10300 to 11500. A weekly close above the 11500 mark should be seen as a sign of strength and one can look to add to longs in the IT space.

CNX Infra, Metal, Energy & Realty: Except Infra all the 3 indices look range-bound in the short to medium term. On a longer term basis Infra is trading above its 40 week moving average. As mentioned previously - it would be prudent to add to positions once these indices close above the 40 week MA or have a positive crossover of a 10 and 40 week MA. Till then, they should be avoided.  

  

       

CNX Small Cap and Mid cap: The Mid cap index is still outperforming relative to the Nifty but the RS line for the small caps has closed above its 40 week MA and the Small cap index looks setup for a break-out to the upside after a long period of consolidation. Any break below above the 5500 level on the small cap index would be bullish.  

Sector Technicals for the week ending – 12th December 2014.

The below table is just a scan that I run to check the overall trend of an index and its performance vs. the benchmark Nifty. For further information please read the signal description and the detailed sector technical analysis further below. For more information on relative strength please click on the Relative Strength section above.

Nifty Weekly Technical Analysis:

Last week’s call went wrong as I expected a range bound week but the opposite happened!. Going forward – The Nifty is at a critical juncture. The 8150-8200 zone is a key support for the short to medium term. The 14 week RSI has weakened and the MACD is also in sell mode. The VIX inched up to about 14%. In the derivatives space FII’s closed long positions in index futures and call options and increased longs in index put options. To sum it up – FII’s have closed longs and taken a bearish stance via put options and technical indicators are pointing to a downside. However, it would be prudent to doubt the medium term uptrend if and only if it gives a weekly close below 8150. Till then, this dip provides an opportunity to play a short term bounce with a favourable risk-reward ratio with a stop around 8150.

Sector Technicals:

CNX Auto: The Auto index is trading within its price channel. But on a relative basis, the RS line is still signalling strength in the auto space relative to the Nifty. The MACD has flat-lined & momentum is waning – A break below the lower channel would be the first sign of worry.

 

Bank Nifty: The banking index closed in the red but on a relative basis the RS line is signalling strength in the banking space relative to the Nifty. Short term supports are at 18000 while long term supports are place above 16000.  

CNX Pharma: The index is still above the important 11000 zone and the RS line saw an uptick suggesting a flight to defensives. 11000 and 10000 are the important supports.   

CNX FMCG: As mentioned before, the view was positive with a breakout at the 20,000 level. For the second consecutive week the RS line has closed above its 40 week MA with an uptick. Considering these moves in Pharma and FMCG together – this could be a rotation to defensives.

CNX IT: The IT index is still an underperformer vs. the Nifty as its RS line is below its 40 week MA. Price action wise, the index was one of the biggest losers last week. As mentioned last week, its better to avoid any longs in the IT space and a close below the second support one of about 10300 would be bearish.

CNX Infra, Metal, Energy & Realty: All the 4 indices look weak in the short to medium term and on a longer term basis all are trading below their 40 week moving averages. As mentioned previously - it would be prudent to add to positions once these indices close above the 40 week MA of have a positive crossover of a 10 and 40 week MA. Till then, they should be avoided.    

      

CNX Small Cap and Mid cap: The Mid cap index is still outperforming relative to the Nifty but the RS line for the small caps has closed below its 40 week MA. Any break below the 4600 level on the small cap index would be bearish.  

Sector Technicals for the week ending – 5th December 2014.

The below table is just a scan that I run to check the overall trend of an index and its performance vs. the benchmark Nifty. For further information please read the signal description and the detailed sector technical analysis further below. For more information on relative strength please click on the Relative Strength section above.

Nifty Weekly Technical Analysis:

The Nifty looks likely to consolidate around these levels till year end with immediate support around 8500. The 8500 strike put has the highest open interest followed by the 8400 strike while on the call side the highest open interest is in the 8600 strike followed by 8700 suggesting a tight range till the end of the December series. Also, the VIX has closed a tad below 12% which is indicative of this view. In the derivatives space FII’s covered long positions in index futures over the week post the RBI monetary policy meet. So we have a low VIX, closure of longs by FII’s and a tight range as per open interest accumulation – all signs pointing to a tight range, at least for the coming week.

Sector Technicals:

CNX Auto: The Auto index is trading within its price channel. But on a relative basis, the RS line of the auto index made a new high and is still signalling strength in the auto space relative to the Nifty. The MACD has flat-lined & momentum is waning – A break below the lower channel would be the first sign of worry.

 

Bank Nifty: The index closed at lifetime highs and on a relative basis the RS line also made a new high - signalling strength in the banking space relative to the Nifty. Momentum wise the index is in overbought and can stay overbought just like the Auto index did during the start of this year.

CNX Pharma: The index tested its resistance at the re-test zone of its uptrend line. Remaining above the 11000 zone is key to the sustained uptrend in Pharma stocks. 11000 and 10000 are the important supports.   

CNX FMCG: As mentioned before, the view was positive with a breakout at the 20,000 level, but this week the RS line managed to close above a downward sloping 40 week moving average. Will this outperformance last just like it did in the previous years ?.  

CNX IT: The IT index is still an underperformer vs. the Nifty as its RS line is below its 40 week MA. Price action wise, the index closed below supports in the 11,600/ 700 zones. A weekly close above this support zone would be bullish, but till then it’s better not to add to longs in the IT space.

CNX Infra, Metal, Energy & Realty: All the 4 indices look weak in the short to medium term and on a longer term basis – all except Infra are trading below their 40 week moving averages – it would be prudent to add to positions once these indices close above the 40 week MA of have a positive crossover of a 10 and 40 week MA. Till then, they should be avoided.    

       

CNX Small Cap and Mid cap: The Mid cap index closes the at all-time highs and looks setup for more upside. Small caps are still positive as they are trading above an important support zone of 4500-4600 and a weekly closing above 5500 could lead to a sharp rally.  

Sector Technicals for the week ending – 30th November 2014.

This update only has the weekly Nifty technicals, will update the sector indices next week owing to RBI policy.

The below table is just a scan that I run to check the overall trend of an index and its performance vs. the benchmark Nifty. For further information please read the signal description and the detailed sector technical analysis further below. For more information on relative strength please click on the Relative Strength section above.

Nifty Weekly Technical Analysis:

The Nifty again closed the week at all-time highs, major sector indices too are in strong uptrends led by the Bank-Nifty. Intermediate and long term supports are in the zone of 8200 and 7800. Momentum wise the 14 period RSI indicator has entered into the overbought zone and can remain overbought provided that the RBI does not surprise on the downside today. The weekly MACD too has signalled a buy signal which is supportive. In the derivatives space FII’s covered short positions in index futures over the week while in the options space they closed positions across the board. Looks likely that the FII’s have reduced their hedges in the options market and remain long in futures in anticipation of a positive announcement. In the options market the 8700 strike call has the highest open interest suggestive of immediate targets in case of a positive outcome by the RBI. 

Update

Hi All, will be updating the weekly technicals tomorrow.