How should you trade the financial sector stocks after the RBI's liquidity measures? Are the banking stocks likely to gain ground in the days ahead? Here is what the charts suggest.
Negative convergence may lead to severe selling pressure and the price may stay weak for a month to a year.
Shares of Housing Development Finance Corporation (HDFC) tumbled nearly 3 per cent to Rs 1,655 levels on the BSE on Monday morning before recovering some of the lost ground
While considering a larger outlook, one needs to look at signals wherein the change in trend holds over a month or a quarter.
Until there is a major shift in the mood of traders and investors, this segment may continue to show deterioration in value.
Despite the stimulus measures by the government and the Reserve Bank of India (RBI), financial sector stocks, including those of non-bank finance companies (NBFCs) have taken a hard knock
A trader who looks for short-term gains, hold positions for a week or fortnight.
The trend looks weak below 5,000 levels for the Nifty Auto index. Although the current formation claims consolidation with lower support around 4,600 levels, the trend remains short on upward rallies
For Nifty Bank, the immediate resistance comes in the range of 20,500 to 20,000 levels
Nifty PSU Bank index is showing a consolidation in the range of 1,600 to 1,200 levels. On the other hand, 22,000 mark is crucial for Nifty Bank.
Whenever a stock shows a consolidation pattern, one needs to wait for the breakout.
The reversal may see selling pressure at higher levels. However, the downside significant supports stand still in these corrective moves.
While taking a bigger perspective on the trend, the daily volume chart might not perfectly depict the scenario. The weekly, monthly or year volumes chart facilitate in taking a call on the same
Whenever the Nifty pharma index has dipped below oversold territory on the Relative Strength Index (RSI), it has seen a stable rise.
VIX is meant to indicate investors' perception of the annual market volatility over the next 30 calendar days.
Mindtree will see an upside bias once it breaks out above Rs 920 levels
For Nifty, a continuous gap-down sessions have dampened the upward move
On a year-to-date basis, the benchmark Nifty is down around 14 per cent
Whenever a stock witnesses higher volumes, which is normally stronger than earlier candles, it indicates severe pressure.
Barring Wipro, all the other major tech companies have outperformed the benchmark Nifty50 index which has slipped 7.6 per cent till date in 2020