Last week even though the Nifty was flat there is enough action in the sectoral indices. Defensive sectors like IT (up 3.79%) and Energy (up 1.80%) are leading the list of gainers and the economy facing sectors like PSU Banks (down 2.38%) & Auto (down 3.37%) are sinking deep in the red.
Strong (Above 50 & 200 EMAs) –
Energy: Wating for a breakout, PPO positive crossover at neutral zone > long way to go on the upside.
IT: Higher top – Higher bottom, PPO positive crossover at neutral zone > long way to go on the upside.
BankNifty: PPO topping out near overbought range.
Financial Services: PPO topping out near overbought range.
PSU Banks: Mean reversion form top end of the range.
Realty: Consolidating at the top of the range.
Range Bound (Between 50 & 200 EMAs – Will get Strong or Weak going ahead ) –
FMCG: Trendless within the range
Weak (Below 50 & 200 EMAs) –
Metals: Downtrend resumes?
Media: Downtrend resumes?
Pharma: Consolidating at the bottom of the range, Newsflow based action difficult to predict.
Auto: Downtrend resumes?
Detailed Note –
- After the failed breakout from the Cup n Handle formation (Click here for the post), the price corrected 5% to 6% and now turned back to challenge the resistance again.
- The turnaround is rather fast aided by the “Positive Reversal” on the PPO.
- “Positive Reversal” – Indicates underlying strength. Good entry or re-entry. Occurs during retracements in an uptrend. Nice to see during price retest of previous lows. “Buy the dips”
- We are already holding TechM, HCLTech and Wipro.
- The Energy sector is testing the 16500 zone for the third time in the last three months. It failed to clear the resistance in its last two attempts. Can it do so now?
- PPO has given a positive crossover and is strengthening above the zero line.
- The probability of a breakout is more and the Oil marketing companies should lead the charge ahead.