Nifty50 - A quick look at the Sectoral Contributions.
Nifty50 - Technical Chart
- The shorter range would be 23800-24000 ( previous highs ) on upside and 22500-22700 ( gap up) on downside.
- The broader range could be 24800-25000 on upside and 21300-21900.
- This is a very tight range and Index is right in the Middle with 5-7% upside or 5-7% downside.
- When we look at sectoral constituents it becomes more clear too.
The Sectoral Look
Top 5 sectors contribute to almost 70-72%. Lets have a look at them.
Finanacials 37.3% weight
Nifty Bank - Wont let the Nifty50 Fall.
- Did not break the lows and made a stronger recovery.
- 5-6% away from all-time highs and a 6-8% bounce from the lows.
- A few large-cap banking stocks tested new all-time highs.
- Looks like it could hold strong.
- Breakout if it can cross 53000-53500.
Nifty Financial Services. - Can it breakout ?
- Tested all-time highs.
- Made the same bottoms in the last 6 months.
- 3 attempts done at the resistance.
- Strong and can hold on to a leadership position.
Nifty IT ( 11.9% weight ) - Won't let Nifty50 Breakout.
- From making new all-time highs to now down 20-25% from peak.
- Back to where it was in Aug 2021.
- Breakdown in Feb.
- Today is also a new low in the downtrend. Tough to reverse quickly after such a breakdown.
- Supports at 32000-33000.
Nifty Auto ( 6.93% weight )- Downtrend and Consolidation
- Had a huge re-rating cycle.
- Peaked in June-Sept 2024 and drifting lower.
- Broke the Election day lows.
- Down 20-22% from peak.
- Tough for it to change trends quickly and reverse.
- Time to consolidate or drift.
Nifty FMCG - Aur Kitna Ghirega
- The post-election move has been negated and is now below election lows.
- Fresh breakdowns in February.
- Now, back to where it was in mid-2023.
- Does not look like it can breakdown further but may get into a tight range.
Nifty Oil and Gas - Reliance is most of it. Stuck and going nowhere
- Saw the deepest correction at bottom it was down 31% from peak.
- Some recovery recently but still down 20-22% from peak.
- Also most of the weight comes from Reliance Inds which is stuck in a tight range.
- Looks like going nowhere.
Conclusion
- Nifty50 as an Index seems to be entering a range-bound period with no major trend.
- Strong uptrend of Financials won't let it fall, Weak Trend in the rest of the sectors won't let it Breakout.
- Median Fall in Midcaps/Smallcaps is much higher and that can create opportunities. Also, new leaders may start showing up on Technical/Fundamental Screens.
- Till the time Nifty50 does not break the big range ( 22k-25k) one needs to be extremely stock specific. Might as well stop looking at Nifty50 for a clue.
- New leadership sectors emerge in such consolidation periods.
- The sectors propping up on possible leadership - Financials, Agri, Agrochemicals. ( will keep posting as we see new trends)
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