Indices TA Update - 15/01/2023
I keep TA simple, my motive is not to predict the exact tops and bottoms but to understand the trend and take decisions accordingly.
Nifty 50 - It is retesting the trendline after a breakout last month. Interesting to see where nifty will head now. Breaking down into the trendline will be a cautious sign. Bulk Buying at this stage is risky. If it is consolidating here for 2-3 weeks in a range, one can look at buying the index.
Nifty Auto - If seen from a broader perspective, we can see a 3-year-long cup and handle breakout in the index. Potential targets for Nifty Auto can be calculated accordingly. In the short term, there can be inflationary and supply-side issues which can be a pain point, but the long-term trend in this sector is looking like a cyclical uptick.
Nifty Bank - As I was stating on my Twitter account for the past few months, this was a sector that was deeply undervalued, and if we expect the economy to grow, banks have to grow as the flow of money is affected otherwise. Currently, I believe the momentum can reside and we can see a short consolidation in the sector, but I don't see much downside when banks are posting record earnings.
Nifty Energy - This is a flag and pole technical pattern forming in this index. Keep a watchlist of top stocks in this sector, as and when momentum catches, this will start rallying again.
Nifty FMCG - This a sector to be cautious about now. FMCG gave good returns in the past year by playing the role of a defensive sector. But now as the opportunities in the market are increasing day by day, institutional money will shift from defensive sectors back to growth sectors.
Nifty IT - I am looking back at this sector from a buying perspective. In India, for me recognizing strong IT companies is quite difficult, hence whenever I play with this index, I generally bet on the top 2 or the overall index itself through ETFs or Mutual funds. Although the Nifty IT run-up has been significant in 2020-2021, right now it won't be a bad time to start accumulating the sector, as IT is inevitable.
Nifty Pharma - Long consolidation is seen in this sector post rallying in 2020-2021. The sector as a whole is going through some headwinds, but there are still some opportunities seen in some companies, like Hospitals. Currently, I am staying out of this sector.
Thank you for reading.
Hope you liked the analysis.
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*Use your own discretion, nothing is an investment advice