Sector Technicals for the week ending – 26th October 2014.

Sector Technicals for the week ending – 26^th October 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 price action on the index was mixed over the last 2 weeks, with a breakdown the week before and a negation of that last week. The Bank-Nifty however is at life time highs and banks having the largest weight in the Nifty could push the Nifty higher near all-time highs. On the derivatives side, the VIX slipped back below 13% and FII’s increased long positions in the index futures space and we also saw an increase in net longs in the call option space. On a longer time frame the 40 week moving average is at 7226 and we have an upward sloping 40 week MA which augurs well.

Sector Technicals:

CNX Auto: Like the Nifty, the Auto index also showed volatile/mixed moves over the last 2 weeks by breaking below its price channel and then closing the week back above its lower trend line. On a relative basis, the RS line of the auto index made a new high and is signalling continued strength in the auto space.

 

Bank Nifty: After giving mixed signals over the past 2-3 weeks the index closed at lifetime highs and on a relative basis the RS line has inched up sharply and we could be setting up for a rally in banking stocks.

CNX Pharma: The index has broken its uptrend-line shown below but the 10000 zone seems like a good support zone to increase longs in pharma stocks. 

CNX FMCG: The FMCG index is also not giving any clear signals and it would be better to wait and watch if the index manages to give 2 successive weekly closes above or below the 19000 mark. The FMCG index is not likely to outperform the benchmark Nifty as the RS line is still in a downtrend with a downward sloping 40 week moving average.

CNX IT: The IT index is no longer an outperformer as its RS line is back below its 40 week MA. Price action wise the index is back near its supports and can give a tradable bounce from these levels.

 

CNX Infra, Metal, Energy & Realty: Infra and Energy still look positive on a short term basis as they are trading above supports. Realty and Metals look the weakest as they are at/below important supports.   

      

CNX Small Cap and Mid cap: The Mid cap index outperformed last week and managed to close above critical supports of 11400-11500. The next support zone lies around 11000 and then 10500. Small caps are still positive as they are trading above an important support zone of 4500-4600 and a weekly closing below 4600 could lead to a sharp fall with next support zone around 4000.  

Sector Technicals for the week ending – 19th October 2014.

Sector Technicals for the week ending – 19^th October 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 index closed below the important 7800-7850 zone which was its previous resistance. The short to medium term trend remains down as long as the index closes below this zone on a weekly basis. In the derivatives space, FII’s continue to be net long in index futures and but have decreased their net longs over the previous week while simultaneously increasing their long positions in put options  suggesting some expectations of downside. The India VIX is at 16% and looks like a failed breakdown as it has crept back above its previous lifetime lows of around 13-14%. To conclude – A rising VIX along with a failed breakdown below key levels does not bode well for the markets. 

Nifty - Short Term Timing Model - Updated as of 19th Oct 2014.

Nifty - Short Term Timing Model - Updated as of 19th Oct 2014.

This short term timing model is a long only model which buys and exits the Nifty index based on a 50 day moving average and an additional filter. This strategy will not outperform every year but it keeps one out of possible down-periods and has performed well over a 20 year period. Performance can be boosted by using short call options along with long positions.  

Buy : When the index closes above the 50 day moving average for 2 consecutive days

Exit : When the index closed below the 50 day moving average.

Current signal: Exit given on 7^th Oct 2014 Nifty closing level of 7852.4.

Yearly Performance:  (2014 figures are YTD)

               

Nifty - Short Term Timing Model - Updated as of 12th Oct 2014.

Nifty - Short Term Timing Model - Updated as of 12th Oct 2014.

This short term timing model is a long only model which buys and exits the Nifty index based on a 50 day moving average and an additional filter. This strategy will not outperform every year but it keeps one out of possible down-periods and has performed well over a 20 year period. Performance can be boosted by using short call options along with long positions.  

Buy : When the index closes above the 50 day moving average for 2 consecutive days

Exit : When the index closed below the 50 day moving average.

Current signal: Exit given on 7^th Oct 2014 Nifty closing level of 7852.4.

Yearly Performance:  (2014 figures are YTD)

                

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

Sector Technicals for the week ending – 12^th October 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 7850 support zone looks likely to be breached in the near term as the MACD sell trigger seems to be an overhang and other major sectors saw their supports breaking in the last week. Also, if the index closes below 7850 for the week then this could be a failed breakout and could see a fast downward move in the coming weeks. In the derivatives space, FII’s continue to be net long in index futures and but have decreased their net longs over the previous week while simultaneously increasing their long positions in put options  suggesting some expectations of downside. Though the India VIX is at 14.33% the CBOE VIX closed at a little over 21% which is surprising as most of the time the India VIX has trader higher than the CBOE VIX.

Sector Technicals:

CNX Auto: As you can see the Auto index has traded within a price channel since the start of the year and last week closed at the lows of that channel. Any closing below this channel could lead to a fast sell-off to supports near 7200-7300.

 

Bank Nifty: 15500-15600 did not hold on a weekly closing basis and this could be a potential failed breakout. A failed breakout along with a sell signal by the MACD does not bode well for the Banking index. Once could sell on rallies till we do not manage to close above 15600.

CNX Pharma: The uptrend seems to have broken as per the trend-line shown below. A weekly close below 10000 would induce further weakness.

CNX FMCG: The FMCG index could not sustain above prior resistance and a weekly close below 19,000 would endanger the short term uptrend.  The FMCG index is not likely to outperform the benchmark Nifty as the RS line is still in a downtrend with a downward sloping 40 week moving average.

  

CNX IT: The IT index is in an uptrend and momentum readings favour the bulls as it is in the overbought zone and with no overhead resistance. The uptrend is intact as long as long as it trades above the 10400-10500 zone. The index has outperformed the benchmark over the last few weeks, and is an outperformer as its RS line is trading above its 40 week moving average.

CNX Infra, Metal, Energy & Realty: Infra and Energy look still look positive on a short term basis as they are trading above supports. Realty and Metals look the weakest as they are at/below important supports and most important – they are trading below their respective 40 week moving average.   

      

CNX Small Cap and Mid cap: The Mid cap index outperformed last week but did not hold critical supports of 11400-11500. The next support zone lies around 11000 and then 10500. Small caps are still positive as they are trading above an important support zone of 4500-4600 and a weekly closing below 4600 could lead to a sharp fall with next support zone around 4000.  

Sector Technicals for the week ending – 26th September 2014.

Hi All, sorry for the late update but been a little busy over the weekend with some personal work. This weeks update just has the Nifty weekly technical analysis along with the update sector scan table.

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 7850 zone proved to be a good support zone yet again last week - 2 weeks in a row now that we have bounced back from those levels. Momentum reading as per the 14 week RSI has cooled off from the overbought zone and the MACD has triggered a sell. A weekly close below supports of 7850 along with a weakening RSI would be the first red-flag. So far, price action suggests the index can move in a range with supports at 7850-7950 and resistance in the 8150-8200 zones. In the derivatives space, FII’s continue to be net long in index futures and have increased their net longs over the previous week while simultaneously increasing their long positions in put options (this has happened 3 weeks in a row now) suggesting some hedging activity indicative of a moderately bullish to range-bound trading view. Though the India VIX saw a bit of a rise, but it is still in its teens and does not reflect any build-up of risk of downside at the moment.

Nifty - Short Term Timing Model - Updated as of 26th Sep 2014.

Nifty - Short Term Timing Model - Updated as of 26th Sep 2014.

This short term timing model is a long only model which buys and exits the Nifty index based on a 50 day moving average and an additional filter. This strategy will not outperform every year but it keeps one out of possible down-periods and has performed well over a 20 year period. Performance can be boosted by using short call options along with long positions.  

Current signal: Buy given on 12^th Aug 2014 Nifty closing level of 7727.05.

Yearly Performance:  (2014 figures are YTD)

                

Sector Technicals for the week ending – 21st September 2014.

Sector Technicals for the week ending – 21^st September 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:

As mentioned last week, the previous resistance of 7850-7950 acted as a support zone and the index bounced back sharply to close near its resistance zone near 8150-8200 levels. Momentum reading as per the 14 week RSI is in the overbought zone. A weekly close below supports along with a weakening RSI would be the first red-flag. So far, price action suggests the index can move in a range with supports at 7850-7950 and resistance in the 8150-8200 zones. In the derivatives space, FII’s continue to be net long in index futures but have reduced their net longs over the previous week while simultaneously increasing their long positions in put options (this has happened 2 weeks in a row now) suggesting some hedging activity indicative of a moderately bullish to range-bound trading view for the rest of the month. As mentioned last week the India VIX continues to make a new low and unless we see a spike in the India VIX till then it should be smooth sailing for our markets.

Sector Technicals:

CNX Auto: No major change to last week’s view as the Auto index saw another new high and also a new high on the RS line suggesting that the uptrend and outperformance vis-à-vis the Nifty index is still intact. Price action wise looks like the auto index is likely to trade in the price channel as shown below, with major support in the 7200-7300 zones.

 

Bank Nifty: There is a good support zone in the 15500-15600 area. Momentum wise, the RSI reading is inching towards overbought and a strong weekly close along with overbought readings would signal strength in banking stocks. As long as 15500-15600 holds on a weekly closing basis the uptrend is intact. On relative terms, the RS line vs. the Nifty is inching higher with a rising 40 week MA which is supportive of long term outperformance.

CNX Pharma: The Pharma index made a new high and the uptrend remains intact as per the trend-line shown below. A weekly close below 9500 would jeopardize the short/medium term uptrend. However, one should tread cautiously in the Pharma space as the index is highly overbought with a reading of 84 on the 14 week RSI.

CNX FMCG: The FMCG index is above major resistance and ended the week flat. A weekly close below 19,000 would endanger the short term uptrend.  The FMCG index is not likely to outperform the benchmark Nifty as the RS line is still in a downtrend with a downward sloping 40 week moving average.

CNX IT: As mentioned last week, the IT index is in an uptrend and broke out to new highs. Momentum readings favour the bulls as it is in the overbought zone and with no overhead resistance, the IT index could possibly be a big gainer in the next few weeks. The uptrend is intact as long as long as it trades above the 10400-10500 zone. Though the index has outperformed the benchmark over the last few weeks, on a longer term we would classify it as an outperformer only if its RS line manages to trade above its 40 week moving average.

CNX Infra, Metal, Energy & Realty: These 4 indices are underperformers vs the benchmark of which Infra and Energy look positive on a short term basis as they are trading above supports and have broken above their short term downtrends. Realty and Metals seem to be at a critical juncture – right above prior support and just below their short term downtrend line. A wait and watch approach would be better to see if these 2 indices break either of the zones.   

CNX Small Cap and Mid cap: The Mid cap index underperformed last week but held critical supports of 11400-11500, a weekly close below these supports could make the short term trend suspect. Small caps are still positive as they are trading above an important support zone of 4500-4600 and a weekly closing above the prior resistance of 5500 could lead to a sharp rally to the upside.