India Sectoral Trend Weekly 6 May

The last two weeks have been tumultuous for the equity markets.

With the straight fall there has been a lot of change in the weekly sectoral trend for the markets.
The main points are:

1. The # of sectors on Sell / Lev Sell mode is 10 with CNX IT Sector in Lev Sell mode for last 2 weeks.

2. Nifty was in Neutral mode as of Friday 6th May.

3. The trend for 11 sectors is Neutral which is quite high indicating the ongoing sideways movement in many indices.

4. Broader market indices like BSE 500, BSE Small Cap, BSE Mid cap and  Nifty CNX 100 are in Neutral zone.

5. The cyclical index Metal, Realty, Cap Goods and IT are in bearish mode while the defensive sectors are in Neutral mode.

The above points clearly shows that the trend is towards accumulating the consumption stocks rather than being in Growth or High beta stocks.

This is inline with the earlier Macro call of Monsoon trade. See Post here.

The weekly color table:

India futures color change to Sell

Nifty color changed to sell mode at today's open and the Bank Nifty also changed to daily sell mode.


The weekly color is still buy for Nifty and Bank Nifty but the reversal trendline is very close at 5700 and 11200 for Bank Nifty.

India Sectoral Trend Weekly 21 Apr

Indian sectoral indices while remaining mostly in buy mode are showing signs of sideways move.

The indices average move last week was just 0.4% and prior week was -0.5% while the Nifty move 1.1% last week and -0.5% prior week.
The average move of last 2 weeks for broader market indices like BSE 500 is at 0.3%, Small cap at 0.6% and Nifty Mid cap was flat.

This shows that while that there was some traction in Nifty there is no clear sectoral leadership as of now which can take markets to new highs.

The weekly color is as follows:

The IT is still maintaining the Neutral color after the Infy's results shows broader strength is still present in the index.

The Auto and FMCG indices are clear winners and this could be a good monsoon macro trade.

India Futures color trend: Indices at color change levels

Nifty futures has been in complete range for most of April within the 6000 and 5700 levels.
But on weekly basis the index has maintained the support.

There is a bullish flag formation on the index which and the index is still trading above the breakout levels which is the bullish sign. See Post here.

The color as we start the week:

                         Weekly          Daily
Nifty                 Buy                Neutral   Buy color on index close above 5900 levels.
Bank Nifty        Buy                Buy         Lev Buy color on close above 12000 levels.

India Sectoral Trend Weekly 1 Apr

Recovery across the sector with just only 5 in Sell mode and 12 in Buy mode. Nifty has also come to Buy mode.

This reinforces the view that stating in earlier posts that market is gonna rally after the Nifty Bullish divergence and VIX rise in tandem with Nifty.

The rise in beta indices like Realty and Infra has been with good volumes shows appetite for Indian stocks at low levels.

The broader market index BSE 500 has also come to Buy mode while the small cap index is still in Sell mode.

The IT index though is still in Neutral mode which shows that rally in more in the beaten up sectors.

The weekly color:

The breadth has improved a lot and that was evident in last weeks State of Market post.

India Sectoral Trend Weekly 25 Mar

Last week has changed a lot in the sectoral trend.
The week was a breakout from the range with Nifty moving up by 5%+ with CNX Realty and Bank Nifty up by 9% and 6% on weekly basis.

The major changes are as follows:

1. Nifty weekly mode has now come to Sell from Lev Sell mode. The index Lev Sell was for 8 weeks.
  The Lev Sell net change for the index was 2.5% which is very less for a Leverage mode. This shows that the major trend is bullish only. It is in the bullish trend that Lev Sell produces such small gains.

2. Banking and IT indices are back to Buy and Neutral mode. These two sectors are good bullish bets going ahead as they are outperforming the broader market.

3. The BSE 500 and BSE 200 indices also recovered to Sell mode indicating that there is recovery in broader market.

4. The recovery from Lev Sell to Sell shows that we have made the bottom for intermediate term.
   The color of Nifty weekly as of Monday open in Neutral.

The sectoral color:

India Sectoral Trend Weekly 18 Mar

The weekly sectoral trend is still on bearish mode. The no change in the trend shows the range trading.

Worth noting is the Sell is maintained in IT indices with last week CNX IT index getting sell of by ~3% on w-o-w basis.

Attached is the weekly trend.

India Sectoral Trend Weekly 11 Mar

India sectoral trend showed not much change from last week.

Most of the Sectors gave some of the gains of the last week.
The weekly candle in most was of Doji near the lows which indicates that there is some respite in selling coming at low levels.

Tech index is still relatively better placed then rest of the indices as it is only sector in Sell mode while others are in Lev Sell mode.

Here is the complete color:

India Sectoral Trend Weekly 4 Mar

Last Week all the sectoral indices rallied with Nifty itself up 4%. This was more of the Budget rally we witnessed.

Since the recovery more or less stalled at Feb highs indicates that the market trend is bearish.

The color of most of the sectors though still remains in Lev Sell or Sell mode.
Not a single sector is in Neutral or Buy mode.

The Bank Nifty and BSE Bank Index is now in Sell mode recovering from Lev Sell mode.

Here is the complete sectoral picture.

India Sectoral Trend Weekly 11 Feb

Last Week was all red for Indian markets. The Nifty index self was about 1.5% down and the only savior was Friday when the markets closed up.

The sector breadth was all -ive with the bias in strong sector like IT also turning to sell now.

Not a single sector was in Buy or Neutral color as of Friday 11th.

This could prove a major turning point as the breadth has never been so bearish since Mar'09. Any further continuation of the trend for next 1-2 weeks will break the overall Bull trend. This extremeness is also captured in the State of Market Report.

P.S. The trend is based on weekly time frame as of Friday  closing.
      Lev Buy and Lev Sell indicates leverage positioning.
      I have included price change with the color for the confirmation.

 

India Sectoral Trend Weekly 4 Feb

There is no major change in trend in the Indian sectors. The main color remains red only.
Nifty itself was in Lev Sell mode last week and is still continuing the mode.

There are only 4 sectors among all which are still not in Lev Sell mode and only IT sector in Neutral or Buy mode.

The sectoral observations:

1. Auto index is now in Lev Sell mode after 2 weeks of sell mode.

2. The IT indices are now in Neutral for CNX IT and  Buy for BSE IT. The difference is due to there composition.

3. The BSE Teck index is now in Sell mode and the color is getting to red from last 3 weeks.

4. The major losers were FMCG, Realty, IT and Auto Index.

5. The Metal, Oil & Gas, PSU and Caps good being in Lev Sell mode were flat to +ive signalling to show divergence. Need to keep a watch on these indices.

P.S. The trend is based on weekly time frame as of Friday  closing.
      Lev Buy and Lev Sell indicates leverage positioning.
      I have included price change with the color for the confirmation.

India Sectoral Trend Weekly 28 Jan

This week there is a major change in the report. While sectors maintained their trend Nifty has come to Lev Sell on weekly charts on break of 5650 levels.

The main observation is the increasing number of sectors being in Lev Sell from 21 Jan and the reducing number of sectors in Lev Buy/Buy mode. The bullishness if any was in a very few sectors IT and Metal mainly. This was surely a warning of waning breadth in broad stocks.

The sectoral observations:

1. From Sell to Lev Sell changes: BSE 500, Bankex, Cons D, Dollex,BSE Metal,  CNX 100, Nifty, CNX Bank.

2. New Sell trigger: BSE Healthcare Index.

3. Lev Buy Indices: BSE IT and CNX IT indices. Though the indices are now in buy mode as of Monday morning.

4. The major money loosers were IT and BSE Teck indices (were in Lev Buy and buy mode) lost 2% each.

P.S. The trend is based on weekly time frame as of Friday  closing.
      Lev Buy and Lev Sell indicates leverage positioning.
      I have included price change with the color for the confirmation.

India: Weekly change in outlook.

Nifty and other broad indices opened in red after last week's fall. We were in bull run what happened?

Well the bull is taking rest and there were ample signs he send our way to let us know that he will be going to sleep and bears will be waking up from hibernation. The sectoral trend along with the State of Market showed that the trend is bearish.

Jokes apart the Nifty formation is very weak after coming into weekly Lev Sell last week. Link here.

Since this being the first weekly Lev sell in this run this can surely do some correction if we break the 5400 levels. The fibonacci support is at 5375 levels and after that the levels if 4800. See the Nifty weekly chart.

What to do here? Should we liquidate the holding?
Well what happens next is anybody's guess but I do feel that the indications are not bullish. One should hold only what shows real growth not just fancy projection from excel.

Nifty @ 5600: Below 200 DMA

Will there be support?

I really do not know how long this level will hold or will there be a bounce.
The index has seen the strongest sell off in the current bull run.  Weekly color is Lev Sell for Nifty now, first time since Mar 09.


I have been bearish and the color was Nifty was Lev sell on daily charts. Check y'day morning post.

Whenever Index has broken the 200 DMA in a bull run, either it reverses in a day or two or it makes a new low about 2-4% and then stabilizes.  Need to watch the action now.

Color of Major's now. A lot has changed since last time from 24 Jan.  Post here.

India Futures diverging from other EM's

Indian markets are completely ignoring what is happening with the other world indices.
US and Europe indices are making new highs for the year with EM's like Taiwan and Korea each day making newer highs.

Our index meanwhile is getting bearish with the research houses going underweight on India. What a sudden change in outlook.

Anyway the color is getting bearish for India.
Nifty is giving whipsaws with no clear direction to trade as every trade is losing one now.

The color as of today is Lev sell on daily which is not changing for last 10 days. The range is getting smaller day by day. Need to watch the 5700 levels now.

Bank Nifty is now in neutral zone with sell mode below 10850 levels.

The only bullish thing as of now is the Index holding the 200 DMA. Thats the last hope for the bulls.

Year 2010 Nifty: System testing the Color code

For long I have been writing about the color of the indices which defines the trend.
I think the best way to know about any strategy is to backtest the strategy. So let us test the Nifty for the color system.

Time frame: Daily for year 2010. Testing only for Longs no Short trade tested.

Buy Condition: Buy color
Sell Condition: Neutral or Sell color

Commissions: 0.10% of trade.


The results

The system was equal to buy and hold but the profit factor of the trade at 4.7 makes it attractive with only 10 long trades for the year.

Also the maximum draw down for a single trade was about 3% which is reasonable given that we are trading on daily timeframe.

More details later.

How to interpret the Weekly sectoral trend

Every week I send the weekly trend for the Indian sectors. Last few posts are 21 Jan , 14 Jan. These trends are of medium term time frame traders.

The main points in the report are Current trend with last 2 weeks of trend and the price change this week and last week.

The trend is defined as the color which could be

·         Lev Buy   --> Leverage Buy:        Higher than 125% exposure    

·         Buy         --> Normal Buy            Normal exposure to 100%

·         Neutral   --> No trend              On side lines

·         Sell       -->   Bearish Trend         Exposure to 100% on sell side

·         Lev Sell  --> Leverage Sell         Trade with > 125% exposure

The Lev Buy and Lev Sell becomes Higher conviction if is repeats for two consecutive week.

The combined trend is called as color of the week for sector.

Example of the recent color view of sectors.

·         The changes are few per week as once we get a trend it generally last for more than 2 -3 months. The recent changes are highlighted in yellow.

·         The high conviction sell are Infra, Realty, Cap Goods and other indices which have been in Lev Sell mode.

·         The high conviction buy are IT and Teck Index which are in Lev buy mode for more than last 3 weeks.

·         Also notice the price change for last 2 weeks. This adds as confirmation that the price is also following the asset allocation for sectors.

The main idea of this report is to take stock of various indices on weekly basis and then allocate the money. If someone wants to trade short then the Lev Sell and Sell index compositions are better sell candidates.

This is my way of quantifying trend on weekly basis. Do let me know if we can improve any further.

Color of Major 25 jan

There has some change in the color of Major Movers recently.

Here is the update view:

The main change is the Nifty coming to sell mode in both time frames while Bank Nifty after crossing the 11100 levels is now in Buy mode on daily charts. The hourly trend was reduced buy from 10850 levels itself. Post here.

Nifty is also quite close to the reversal levels of 5900 on daily charts while it will be reduced buy at 5800 levels on hourly charts.

India Sectoral Trend Weekly 21 Jan

The last week has very few changes in the sectoral rotational model.
Major changes and observations are:

1. BSE 100 and Oil & Gas came to Lev sell mode from Sell mode with the Oil & Gas index major looser for the week at -4.5% and Caps Good at -4.5% was the second biggest looser was already in Lev Sell mode.

2. BSE Healthcare is now in Neutral mode after coming to buy mode last week.

3. Other indices downgraded are FMCG and  Metal Indices. Both the indices are getting coming down in ratings from last 3 weeks.

4. Major looser among Lev Buy mode was BSE Teck Index while major gainer in Sell mode was Bank Nifty.

P.S. The trend is based on weekly time frame as of Friday  closing.
      Lev Buy and Lev Sell indicates leverage positioning.
      I have included price change with the color for the confirmation.

Color of Major Movers 17 Jan

The major movers continues to be in Sell mode from last week. Last week's post here.

The main change is Nifty and Ban Nifty came to daily Lev Sell mode on break of 5850 and 11000 levels.

This time let me also post the Nifty and Bank Nifty daily charts.

The chart is does not looks that good as I made it in a hurry. Will do a good job next time.