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Hi All, sorry i am late with last week's analysis due to some personal work but will write it up by today evening. 

Update for the week ending – 24th August 2014.

The below table are just scans that I run to check the overall trend of an index and its performance vs. the benchmark Nifty. For further information please read the detailed analysis below and for more information on relative strength please click on the Relative Strength section above.

Nifty Weekly Technical Analysis:

The index saw a breakout of its previous highs and if it manages a weekly close above the previous high of around 7850 levels then we could see a sustained rally higher. In the derivatives space, FII’s are net long in index futures by more than 100,000 contracts and are also net long in call options suggesting a bullish bias. The major support zone is 7400-7500 for the medium term.  

Sector Technicals:

The Auto, Banking, Pharma and IT indices saw fresh break-outs during the week and look likely to rally further, price action and momentum readings are supportive of this while outperformance of the IT index is still suspect as the RS line is below its 40 week MA.

FMCG is still struggling at resistance and is a relative underperformer vs the Nifty while Metal, Infra and Energy indices are trading above short term supports. The Realty index looks the weakest as its trading below important supports.

Update for the week ending – 8th August 2014.

The below table are just scans that I run to check the overall trend of an index and its performance vs. the benchmark Nifty. For further information please read the detailed analysis below and for more information on relative strength please click on the Relative Strength section above.

Nifty Weekly Technical Analysis:

The biggest danger at the moment looks to be the FII positions in the index futures market, they have gone from being almost 90,000 contracts net long to now 3,000 contracts net short and have simultaneously increased longs in put options !! – Not a good sign for the market. Though we are still above support zones of 7400-7100 but it is interesting to note that when the Nifty fell from 7800 to 7400 during the budget, FII’s were net long that time but this time they are net short. Moreover, Nifty as well as majority of the sector indices have given a sell signal on the MACD and show loss in momentum as per the RSI indicator. Will Nifty break 7400 on the downside in the coming weeks?...time will tell – But coming few weeks are going to be volatile – that’s for sure given the global backdrop – wonder what Germany’s DAX index is pointing to as it’s lost a little than 10% in few weeks while the dollar index is creeping up (flight to safety of the dollar?).

CNX Auto: As highlighted earlier, flattish RS line suggests that the Auto index might perform poorly vis-à-vis the Nifty. For the near term one should be cautious as MACD and RSI readings are weakening. The short term trend looks to be in danger as the index closed below the uptrend line from 2014 lows.

CNX Bank Nifty: The index is facing considerable resistance near the 15,700 area and as highlighted the previous weeks- underperformance against the Nifty is likely to continue as the RS line is pointing down and tests its 40 week MA. A breakout both on the price as well as the RS line to new highs will confirm if the uptrend and outperformance of banking stocks is intact. The momentum reading on the 14 week RSI has fallen below its supports and the MACD has given a sell signal which is a major overhang, the 14000 and 13000 zones remain critical supports for this index.

CNX Pharma: The RS line is above its 40 week MA which is an outperform as per our signal description. Price action wise, the index gave up some gains as it could not sustain the new highs (as mentioned last week). However, the short to medium term uptrend should be intact as long as it trades within its price channel.

CNX IT: The index needs to breakout of its resistance around 10,500 which will change the trend to positive. Long term outperformance though is doubtful as the RS line vs the Nifty is still below its 40 week MA. The 14 week RSI has reverted from the overbought zone suggesting that the index might not take out this resistance, though this could change during the week. It would be prudent to wait before entering the IT space and enter only on a breakout above 10,500.

 

CNX FMCG: The FMCG Index has a lot of overhead resistance at 19,000. Though the index signalled is a buy with a positive crossover of the 10 and 40 week MA, long term outperformance seems muted as the RS line is still below its 40 week MA while the index has room to run up as momentum readings on the 14 week RSI are pointing up but far from overbought. It would be best to enter FMCG once it breaks its resistance zone.

CNX Metal, Infra, Energy & Realty: The 4 indices may see further correction/ consolidation in the coming weeks as momentum readings on the 14 week RSI are moving lower and the MACD has triggered a sell. However, long term outperformance of the Energy space looks doubtful as its RS line is below its 40 week MA. The Metals index was unable to take out previous resistance and looks likely to head to the 3000 zone. The Infra index closed below critical support, below which it can slide to 2800 levels. The Energy space looks very weak and could easily slide to the next support near 9000. The Realty index is weak as it closed below 240. The realty index could easily slide to the 200 levels.

CNX MIDCAP Index: The long term remains positive as long as 9800-9900 holds. On a shorter timeframe, the index looks likely to drift down to its support zone  at 10,400-10,500. The RS line below failed to cross above its previous highs which suggests muted performance vis-à-vis the Nifty. Momentum reading on the 14 week RSI has deteriorated considerably over the last few weeks while the MACD has also given a sell signal.

CNX Small Cap Index: The index broke support around 5000 levels. The RS line is pointing down and is suggesting relative underperformance vis-à-vis the Nifty in the short term. Slowing momentum as per the 14 week RSI weakening a sell signal on the MACD are key risks and suggest that the index could break lower. Next key supports are at around 4000 at the moment.

Update for the week ending – 3rd August 2014.

The below table are just scans that I run to check the overall trend of an index and its performance vs. the benchmark Nifty. For further information please read the detailed analysis below and for more information on relative strength please click on the Relative Strength section above.

Nifty Weekly Technical Analysis:

The index failed to close above 7800 for the week due to the sell-off on Friday. The MACD histogram continues to weaken and we may see a bit of volatile sessions going ahead however the RSI is taking support around 63-64 levels and we are trading above key support zones. A breakdown in RSI support and a sell signal by the MACD could spell trouble for the medium term. FII index futures data shows that they have increased long positions during the week – so we could see a bounce back to 7700 levels but trading would be volatile as we are still above important support zones of 7400. Looks likely that we are going to trade in a range between 7400/ 50 and 7800/ 50.

CNX Auto: As highlighted earlier, flattish RS line suggests that the Auto index might perform poorly vis-à-vis the Nifty. For the near term one should be cautious as MACD and RSI readings are weakening. However, the medium term uptrend would be in danger if the index breaks below the 6500 zone as that converges with the uptrend line as well as prior support.

CNX Bank Nifty: The index is facing considerable resistance near the 15,700 area and as highlighted the previous weeks- underperformance against the Nifty is likely to continue as the RS line is pointing down and tests its 40 week MA. A breakout both on the price as well as the RS line to new highs will confirm if the uptrend and outperformance of banking stocks is intact. The momentum reading on the 14 week RSI has fallen below its pre-election run up readings and the MACD has given a sell signal which is a major overhang, the 14000 and 13000 zones remain critical supports for this index.

CNX Pharma: The Pharma Index made new life time highs this week, and with the negative price action in other indices this suggests a rotation back into the defensive Pharma space which is evident from the RS line. The RS line crossed its 40 week MA which triggered an outperform as per our signal description. Price action wise, the index could give up some gains as it could not sustain the new highs. However, the short to medium term uptrend should be intact as long as it trades within its price channel.

CNX IT: The index needs to breakout of its resistance around 10,500 which will change the trend to positive. Long term outperformance though is doubtful as the RS line vs the Nifty is still below its 40 week MA. The 14 week RSI has reverted from the overbought zone suggesting that the index might not take out this resistance, though this could change during the week. It would be prudent to wait before entering the IT space and enter only on a breakout above 10,500.

 

CNX FMCG: The FMCG Index has a lot of overhead resistance at 19,000. Though the index signalled is a buy with a positive crossover of the 10 and 40 week MA, long term outperformance seems muted as the RS line is below its 40 week MA while the index has room to run up as momentum readings on the 14 week RSI are pointing up but far from overbought. It would be best to enter FMCG once it breaks its resistance zone.

CNX Metal, Infra, Energy & Realty: The 4 indices may see further correction/ consolidation in the coming weeks as momentum readings on the 14 week RSI are moving lower and the MACD has triggered a sell. However, long term outperformance of the Energy space looks doubtful as its RS line is below its 40 week MA. The Metals index was unable to take out previous resistance and looks likely to head to the 3000 zone. The Infra index closed at critical support, below which it can slide to 2800 levels. The Energy space looks very weak and could easily slide to the next support near 9000. The Realty index also closed at crucial supports, if 240 breaks on the downside then the realty index could easily slide to the 200 levels.

CNX MIDCAP Index: The long term remains positive as long as 9800-9900 holds. On a shorter timeframe, the index looks likely to trade in a range of 10500-11,500. The RS line below failed to cross above its previous highs which suggests muted performance vis-à-vis the Nifty. Momentum reading on the 14 week RSI has deteriorated considerably over the last few weeks while the MACD has also weakened during this time.

CNX Small Cap Index: The index held support around 5000 levels. The RS line is pointing down and failed to cross above its previous highs suggesting relative underperformance vis-à-vis the Nifty. Slowing momentum as per the 14 week RSI weakening MACD are key risks and suggest that the index might break its supports. Key supports are 4900/5000 and 4000.

Update for the week ending – 27th July 2014

Update for the week ending – 27^th July 2014.

 Nifty Weekly Technical Analysis:

The Nifty took support at 7400 and bounced back to the 7800 mark during the week. The index failed to close above 7800 in Friday’s trade while foreign markets also closed in the red on Friday. Successive daily closings above 7800 could trigger further short covering, while a key risk looks to be the dollar index which bounced back from sub 80 levels and is trading near 81, which along with falling global markets is suggesting a flight to safety – in addition, the defensives such as IT, Pharma and FMCG indices also rose last week. The MACD histogram continues to weaken and we may see a bit of volatile sessions going ahead. FII index futures data shows that they have increased long positions during the week. Important supports lie at 7400, 7200. Closing below that zone will open the range till 6800.  

CNX MIDCAP Index: Momentum reading on the 14 week RSI has deteriorated considerably over the last few weeks while MACD divergence has also weakened during this time. These remain key risks in the short term; however the long term remains positive as long as 9800-9900 holds. The RS line below failed to cross above its previous highs which suggests muted performance vis-à-vis the Nifty.

CNX Small Cap Index: The index held support 5000 levels. The RS line is pointing down and failed to cross above its previous highs suggesting relative underperformance vis-à-vis the Nifty while slowing momentum as per the 14 week RSI weakening MACD are key risks. Key supports are 5000 and 4600.

CNX Auto: A Flattish RS line suggests that the Auto index might perform poorly vis-à-vis the Nifty, this is also evident from the price action of last 2 weeks as the Auto index did not participate much in the upside. For the near term one should be cautious as MACD is weakening after such a run-up, Supports for the index lie at 6500 and 6000.

CNX Bank Nifty: The index is facing considerable resistance near the 15,700 area and as highlighted the previous week- underperformance against the Nifty is likely as the RS line is pointing down and tests its 40 week MA. The momentum reading on the 14 week RSI has fallen below its pre-election run up readings and the MACD almost is at a sell signal, 14000 and 13000 remain critical supports for this index.

CNX Pharma: The Pharma Index made new life time highs this week, and with the negative price action in other indices this suggests a rotation back into the defensive pharma space which is evident from the RS line. The RS line failed to cross its 40 week MA which still not warrants a outperform as per our signal description.

CNX IT: The index overcame resistance around 10,000-10,200. Price action wise, if the index breaks out to new highs along with a positive crossover of its 10 and 40 week moving average then the trend will change to positive. Long term outperformance though is doubtful as the RS line vs the Nifty is still below its 40 week MA.

CNX FMCG: The FMCG Index took out its short term resistance of 18200 and has a lot of overhead resistance at 19,000. Though the index signalled is a buy with a positive crossover of the 10 and 40 week MA, long term outperformance seems muted as the RS line is below its 40 week MA while the index has room to run up as momentum readings on the 14 week RSI are pointing up but far from overbought.

CNX Metal, Infra, Energy & Realty: The 4 indices may see further correction/ consolidation in the coming weeks as momentum readings on the 14 week RSI cooled off from the overbought zone. However, long term outperformance of the Energy space looks doubtful as its RS line isbelow its 40 week MA.