PSU banks, metals and auto sectors indicate a major shift in their trends in the weeks to come. Nifty too seems to be heading to the higher levels of 11,800.
Vishal B Malkan
The market has begun the week on a cheerful note, continuing the positive move that had begun last week. The volumes have been good, with the price getting into a higher top and higher bottom formation. More importantly, as we head into an important time cycle this week, March 21, the equinox signals an important change in market trend. So the next two weeks could show some substantial movement across various sectors.
A few sectors are displaying signs of major shifts in trends. An analysis of their monthly charts reveal some important signals.
Here is the Sectoral analysis using the technical tools:
The weekly chart of Nifty PSU Index has made a higher bottom that indicates strength in the medium term. The momentum indicator RSI is also poised at important support at 40. This indicates that the bottom of 2,660 could hold good. A few banks that look good from this sector are Bank of India, Punjab National Bank and Bank of Baroda, which are at multiple support levels along with bullish divergences on momentum as well as volatility indicators.
The weekly chart of Nifty Metal Index displayed a Hammer Pattern last month on price, which is bullish trend reversal signal candle. The significance of this pattern is exaggerated since it appears at the Fibonacci support zone between 50-61.8 percent of the major upswing. The RSI is taking support at 40, the lower support zone for the bull trend.
The Nifty Auto Index shows a similar pattern with price taking support with an indecisive candle pattern at the important support zone of Fibonacci 50 percent retracement levels. Maruti Udyog, Baja Auto and Ashok Leyland are good buy candidates from this sector.
The above analysis confirms that a confluence of indicators brings more probability to trend change indications.
To conclude, these sectors indicate a major shift in their trends in the weeks to come. Nifty too seems to be heading to the higher levels of 11,800 with the market getting more conducive to swing and positional trades. The coming fortnight could see important moves on the above indices.
The author is Founder of MalkansView.Disclaimer: The views and investment tips expressed by investment expert on moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.The Great Diwali Discount!
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