Technical Analysis of Indian Equities by Nooresh

Quick Charts–Nifty, Bank Nifty & Stock Performance from March bottom to June.

As I write this post the Dow Jones is down 1000 points and Nifty has reversed 300-400 points from recent highs. Had given an Alert signal for people to be careful -

https://twitter.com/nooreshtech/status/1269880749626281989 

Before the post  a Reminder.

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This is for the MC Pro Users.

Let us take a look at Nifty

Nifty 50 June

  • Nifty went very close to 61.8% retracement of the entire fall from 12400 to 7511.
  • The gaps at 9600-9700 on either side is the next price point to watch for.
  • If we sustaining below 9600 then maybe we can start looking at another downleg or a sideways zone being established.

Bank Nifty

Bank Nifty June

  • Bank Nifty has not been able to retrace even 38% of the downmove and like mentioned in previous posts after a bear market the leading sector struggles in the pullback.
  • 22000 will now act as a critical resistance and if that gets crossed will be a positive indication for Bank Nifty.
  • Similar Gap for Bank Nifty is 19600.

In our earlier post - Liquidity effect greater than Covid19 for Nifty50, leading to Sector Rotation. we had looked into how sector rotation has taken place.

We looked at Performance of Nifty 50 stocks.

Now we take a quick look at the price performance of the whole NSE universe. My team mate Harsh Doshi has done some numbers.

Can download the entire sheet from here. Nifty v/s Stocks

1) Fall From 12 Feb'20 to 24 Mar'20 – Nifty Down 36%

Stocks outperforming Nifty i.e. FALL less than -36% = 489/1549 (32% stocks)

Stocks underperforming Nifty i.e. FALL more than -36% = 1060/1549 (68% stocks)

2) 24 Mar'20 to 5 Jun'20 – Nifty Up 30%

Stocks outperforming Nifty i.e. RISE more than +30% = 989/1549 (64% stocks)

Stocks underperforming Nifty i.e. RISE less than +30% = 561/1549 (36% stocks)

March Bounce  No of Stocks  % of stocks 
Above 30%  981 63.37 
Above 40%  757 48.90 
Above 50%  568 36.69 
Above 60%  407 26.29 
Above 80%  205 13.24 
Above 100%  109 7.04 

So roughly 36% of the stocks bounced back 50% from the lows.

This concurs with our view that in the bounce back a lot of stocks do a big move from the lows and in the next dip there are good chances a lot of them may outperform. Read the long post -

Opportunities in Bear Markets and Consolidations post 1992, 2000, 2008 and 2020.

or hear the Video Explanation of the above post. - https://www.youtube.com/watch?v=PQEeYW1LbNs 

A lot of opportunities may again come up in the consolidation or the next down leg so keep researching

Conclusion

  • For now we watch for 9600-9700 till that holds stock specific action could continue.
  • if Nifty breaks 9600 and Bank Nifty 19600 we wait for price momentum to see if it has more legs down or going into a consolidation.
  • But to repeat again this would be the time to look for interesting ideas which ran up too fast.

 

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Opportunities in Bear Markets and Consolidations post 1992, 2000, 2008 and 2020.

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Article by Nooresh Merani

Nooresh has written 2741 articles.

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{ 1 comment… add one }
  • Rohit Mateti June 12, 2020, 17:37

    Excellent analysis

    Reply

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