INSUBCONTINENT EXCLUSIVE:
The week gone by saw the broader market stabilise even as some of the lagging sectors showed an improvement and posted gains
On anticipated lines, the Nifty tested its previous lifetime high and ended at a fresh lifetime closing high, putting on decent gains
The benchmark Nifty50 index ended with a gain of 268.15 points, or 2.44 per cent, on a weekly basis.
The Nifty50 continues to be in a
30-month-long upward rising channel
In all likelihood, we will see it extend the gains and move towards the upper range of the upward rising channel
However, the index remains slightly overstretched on the daily charts and we might see intermittent consolidation and a minor throwback at
some levels going forward.
The coming week is likely to see Nifty face resistance at 11,310 and 11,435 levels, while supports exist at
Given the breakout, the range for NIFTY should get a little wider in the coming weeks.
The weekly RSI stood at 70.0269 and it has marked a
fresh 14-period high, which is a bullish indication
It does not show any divergence against price
The weekly MACD continues to be bullish even as it trades above its signal line.
On the candles, a big white body has occurred
It is generally considered a bullish signal
As this has occurred during a breakout, it lends strength and credibility to the breakout.
Pattern analysis shows Nifty has successfully
overcome the falling trend line resistance area, which was created by a lower top that occurred in between
With the current breakout, the Nifty50 has moved past this intermediate resistance and has kept its 30-month-long upward rising channel
intact.
Overall, the Nifty has achieved a breakout and is extremely likely to extend its upward move in the coming days
However, given its overbought nature on the daily charts, Nifty might actually see minor throwbacks and consolidation at higher levels.
Just
like the previous week, we recommend making select purchases at each minor dip that the consolidation activity may offer
No major downsides are likely, but some volatility may creep in causing some rangebound oscillations.
Overall, positive outlook is advised
for the coming week.
A study of Relative Rotation Graphs throws up an interesting reading
After maintaining leadership, FMCG, Bank Nifty and financial services are seen losing momentum steadily
However, we may still see sporadic and stock-specific out-performance coming from these sectors
Energy and pharma are seen improving their relative outperformance consistently against the broader market
PSU banks are keeping pace with energy and pharma packs and it is also seen maintaining its relative momentum against the broader
market.
The most interesting and important point is that the sectors and broader Indices like CNX100, 200 and 500, Auto, Nifty Junior,
Midcap, Auto and Infrastructure, which were consistently weakening on the relative momentum front, are arresting their decline.
Furthermore,
they have also started improving their momentum against the broader market
All this will prevent any major downsides if any throwback occurs
Metals and media are not expected to put up any significant performance and so are realty and PSE packs.
Important Note: RRGTM charts show
you the relative strength and momentum for a group of stocks
In the above Chart, they show relative performance as against Nifty index and should not be used directly as buy or sell signals.
