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:

Nifty Two trendlines will define the move

Nifty index has been trading in a range for quite some time.

The index tested the trendline resistance from Nov and Dec highs but failed to cross it. The second test within a week again failed to move above it.
While on the downside the 200 SMA has been strong support for some time.

The daily charts also show another support zone at 5700 levels where the volume profile shows good buying action in the past.

The worrisome part is that the rise from 5700 levels has getting smaller and smaller and in April we had the third bounce which was half of last time and did not last for even 3 days.  This does paint a bearish picture.

Worth noting is the near stagnation at 200 SMA levels without taking out the peak of first test after the breakout from 200 SMA.

Any direction breakout from the above two trendlines will set the direction for future.

Attached is the chart.

Well its not all bearish for Nifty, there is a bullishness also in form of invested Head and Shoulder.  This particular pattern is in formation so have a watch on this.

The bullishness will come only on break above the neckline at 5950 levels.

The volumes which has been lower as per the textbook pattern. Need to watch the volumes on upside breakout here.

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 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.

Nifty: Why 2011 is not 2008? Pattern repetition not happening

The 2011 first quarter looks quite similar to 2008 first quarter in some respects.

The market makes a top and then sharply falls. Then after being sideways for 4-6 weeks a rally comes. The rally soon falters and rest is history.

But the study shows that the pattern will not repeat itself. The initial analysis suggests that the signature of the move is different but the complete answer can be know in next 2 weeks i.e. by mid April.

First the charts showing the two periods.

The pattern though looks quite similar as mentioned but the key differences are:
1. The rise after the fall has been much stronger this time.
2. The volumes are better on rise for this rally.

Analyzing the 2008 pattern the index was above the 50 week SMA for 2 weeks and then in 3rd week the index closes below the 3 weeks low. The high of that week then becomes the resistance with ~20% fall coming on break of the crucial point of breakout from 50 week SMA.


The above are quite famous pattern for any down leg and is called A-B-C pattern. More details later.

Now coming to present, the Index has come out of the 50 SMA and will close above the 50 SMA for 2nd week in a row. If we consider this week as breakout point then the weeks low at 5660 is the crucial low to be maintained. For any fall to come then the next 2 weeks will be pointer.

So the 5650 (~ lows of 5660) will be the decider for the pattern.Keep watch on those levels.

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.

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.

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.

India Sectoral Trend Weekly 14 Jan

Here is the weekly trend analysis report. It got delayed due to some technical issues in data.

P.S. The trend is based on weekly time frame as of Friday 14th closing.
      Lev Buy and Lev Sell indicates leverage positioning.
      I have included price change with the color for the confirmation.

The major changes from the last report (post here 7th  Jan) are:

1. CNX IT and BSE Healthcare got downgraded from Lev Buy to Buy mode.

2. BSE Cap Goods and Nifty Junior are now in Lev Sell mode from Sell mode.

3. Major losers CNX Infra, CNS Realty, BSE Cap goods, Oil & Gas, Realty, Bank Nifty were in Lev Sell mode.

4. Only CNX IT got sold off 3% while still being in buy mode. It is the major looser in the buy mode and the main reason was earnings disappointment.

5. Indices in Lev buy mode FMCG, BSE IT, Metal, Teck had only -0.2% cumulative change.

Here is the color view.

India Sectoral Trend Weekly as of 7 Jan

Last week a lot changed in the sectoral trends for India. The major change was in Nifty itself from Buy to Sell mode.  Last week's sectoral trend is here.

P.S. The trend is based on weekly time frame as of Friday 4th closing.
      Lev Buy and Lev Sell indicates leverage positioning.
      I have included price change with the color for the confiramtion.


The major observations are:
1. Nifty trend on weekly is Sell from Lev buy and it was triggered at 5980. Post here.

2. BSE Auto Index, Oil & Gas, Dollex 30 changed to Sell mode now.

3. BSE IT, Healthcare, Metal, Teck and CNX IT are still in Lev buy mode.
   Among then only Metal Index closed -4% and the reversal level for buy mode is 16500.

4.  Lev Sell Indices --> CNX Infra, Realty, BSE Mid Cap, Power Index, PSU Index, BSE Realty, BSE Small Cap, Nifty Mid cap Index.

Color View

India Sectoral Trend Weekly as of 4 Jan

India sectoral color can give a sense of flow which can be used for positioning.
The update is as of 4 Jan eod and are based on weekly charts which are less volatile than daily charts.
This means that the weekly color has more significance than daily color.

Key observations:

1. BSE FMCG index is now in weekly Lev Buy mode which was triggered on Friday 31 Dec.

2. BSE Metal is also in Lev Buy mode.

3. Both the FMCG and Metal Index changed from Neutral to Lev Buy mode which assumes more significance and can be bot on first change of color.

4. Nifty changed to Lev buy from Neutral and has been updated regularly here in this blog.

5. PSU, Midcap and Small cap are in Lev Sell mode. The PSU Index has been in sell mode from 19 Nov.

Color view.
 

India Sector Ranking 20 Dec

I am starting a new series for sectoral ranking so that the bullish and bearish bets can be separated for sectors and we can get an idea what is leading/lagging the markets.

The ranking is based purely on my own system which till now is making sure that no big trend is missed.
I am using weekly data for starting and will soon start the daily updates 2-3 times a week so that we can catch the trend early.

P.S. Please let me know how I can improve these sectoral trends. Any idea is appreciated.

Key observations:

1. BSE Oil & Gas and Metal indices changed from Sell to neutral mode.
2. BSE Power changed from Sell to Lev Sell.

The ranking as of now are like this:

	13-Dec	20-Dec
Sector	Color	Ratings
CNX IT - FUTURES	Lev Buy	Lev Buy
BSE Teck Index	Neutral	Lev Buy
BSE IT Index	Lev Buy	Lev Buy
BSE Healthcare Index	Lev Buy	Lev Buy
BSE Auto Index	Lev Buy	Buy
NSE50 NIFTY	Neutral	Neutral
NSE CNX 100	Sell	Neutral
BSE Sensex	Neutral	Neutral
BSE Oil & Gas Index	Sell	Neutral
BSE Metal Index	Sell	Neutral
BSE FMCG Index	Neutral	Neutral
- BSE DOLLEX 30	Neutral	Neutral
- BSE 200 INDEX	Sell	Neutral
- BSE 100 INDEX	Sell	Neutral
CNX BANK INDEX	Sell	Sell
NSE Jr Nifty	Sell	Sell
NIFTY MIDCAP 50	Sell	Sell
BSE Small Cap Index	Sell	Sell
BSE PSU Index	Sell	Sell
BSE Mid Cap Index	Sell	Sell
BSE Consumer D	Sell	Sell
BSE Cap Goods	Sell	Sell
BSE Bankex	Sell	Sell
- BSE 500 INDEX	Sell	Sell
CNX INFRA	Sell	Sell
BSE Realty Index	Lev Sell	Lev Sell
BSE Power Index	Sell	Lev Sell
CNX REALTY	Lev Sell	Lev Sell

Weekly Indices review 10 Nov 09

Auto Sector

CMP: 6621 The index took support at 50 DMA of 6250. Weekly candles are bullish with good base formation.

Resistance level is 6750 which is old top. Support at 6400.



Market Perform Can be brought on cross of 6700. Break of support of 6400 is bearish.





Cap Goods

CMP: 13140 Index is below the Daily 50 MA of 13400. Also weekly charst have bearish RSI divergence.

The levels of 13500 is 50% retracement which is resistance now.



Under Perform Any bounce to 13000 above levels can be shorted as fibonacci breakout has failed.





CNXBank Index

CMP: 9125 The weekly charts still show more upside momentum as is it still above the 21 WMA of 7950.

Strong weekly candles suggests 9500 top can be crossed.



Market OutPerfrom Support of 8950 and resistance of 9600.



FMCG Index

CMP: 2825 Weekly charts have bearish RSI divergence although the upside momentum is still strong.

Support at 2650 levels. Resistance is at 2900.



Market Perfom Short term weakness can be brought.





Healtcare Index

CMP: 4578 Weekly breakout on charts. Strong upside momentum.

Daily prices at support of 21 MA of 4400.



Market OutPerform Dips to be brought.





IT Index

CMP: 4492 Short term weakness is there on weekly charts

Support at previous bottom of 4260. Resistance at 4600.



Market Perform Range bound movemnet within 4800 to 4200.





Metal Index

CMP: 14850 Weekly rebound from 21 MA of 1300 levels.

Shorting can be done at top of 15500 as RSI divergence is there.





Market Perform Resisatnce is at 15000 levels.



Oil & Gas Index

CMP: 9861 Weekly charts are rebounding from lows. Bearish formation as RSI divergence is there.

Daily charts have resistance at 10000 levels.



Market Underpeform The index has resistace at 10000 levels.





Power Index

CMP: 2990 Index holding support at 21 WMA of 2950.

Daily resistance is at 3050 levels.



Market UnderPeform Shorts can be added at 3100 levels.





Realty Index

CMP: 3827 Index has not broken out of 23.6% retracemnet levels.

Daily resistance levels are 4300 levels.



Market UnderPerform Weakest sector among all. Major support is at 3000 levels.