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Friday, May 27, 2011

Stock Index Chart Patterns - BSE Sectoral Indices, May 27, '11

In last month’s analysis of the BSE Sectoral indices, I had looked at the weekly bar chart patterns from Mar ‘09 onwards. This month, I have attached the one year bar chart patterns once again to get a clearer view of the near term situation.

BSE Auto Index

BSE Auto Index

BSE Auto index is technically still in a bull market – despite the dip below the 200 day EMA during Feb and Mar ‘11. The index received good support from the 8115 level and bounced up to prevent the ‘death cross’ of the 50 day EMA below the 200 day EMA. However, the technical indicators are looking bearish and the index is struggling to stay above its long-term moving average. The down trend from the Nov ‘10 top is intact. Hold.

BSE Bankex

BSE BANKEX

BSE Bankex has once again slipped below the 200 day EMA and the ‘death cross’ looks imminent. The index has turned up before reaching its support level of 11330, but the technical indicators are not holding out much bullish hopes. The 7 months long down trend is yet to be reversed. Hold.

BSE Capital Goods Index

BSE Capital Goods Index

The down trend in the BSE Capital Goods index has turned into a bear market, confirmed by the ‘death cross’ in Jan ‘11. The recent rally faced strong resistance from the falling 200 day EMA. The technical indicators are mildly bullish. Buy only on a clear break above the 200 day EMA.

BSE Consumer Durables Index

BSE Consumer Durables Index

BSE Consumer Durables index has been one of the better performers and is in a bull market. It recovered quickly from the drop below the 200 day EMA in Feb ‘11, but the up move faced resistance from the 6600 level. The index is making a saucer-shaped bullish pattern. Add on a break above 6600.

BSE FMCG Index

BSE FMCG Index

BSE FMCG index has been the star performer during the past year, and has outperformed the Sensex in the past 7 months. It formed a bearish triple-top pattern and dropped below the 200 day EMA in Feb ‘11. A magnificient recovery took the index to a new high this month. Negative divergences in all four technical indicators has stalled the rally. Any dips can be used to add. 

BSE Healthcare Index

BSE Healthcare Index

BSE Healthcare index has recovered from a 2 months stay below the 200 day EMA, but the rally has lost momentum. Technically, the index is in a bull market but is well below its Jan ‘11 top. Hold.

BSE IT Index

BSE IT Index

BSE IT index performed sensationally till its peak in Jan ‘11. The subsequent correction bounced up strongly from the rising 200 day EMA, but failed to test its Jan ‘11 top. This time, the index has dropped below the 200 day EMA, and the ‘death cross’ will confirm a bear market. Technical indicators are bearish. Hold.

BSE Metal Index

BSE Metal Index

BSE Metal index is in a bear market, despite a valiant effort in Apr ‘11 to reverse the trend. The technical indicators are hinting at a recovery, but the index has dropped well below the 200 day EMA. Buy only on a convincing move above the Apr ‘11 top. Avoid till then.

BSE Oil & Gas Index

BSE Oil & Gas Index

BSE Oil & Gas index is a clear example of how populist government policies and meddling can push a good sector into a bear market. The so-so performance of the largest private sector player, Reliance, has also not helped the cause of the index. The index has recovered some what from oversold conditions, but has a long way to go. Avoid.

BSE Power Index

BSE Power Index

BSE Power index has been in a down trend since Oct ‘10 and sliding deeper into bear territory. The technical indicators are bearish. Avoid.

BSE Realty Index

BSE Realty Index

BSE Realty index is also deep inside a bear market, with little hope of any recovery soon. Avoid.

Five sectoral indices are in bear markets. Even good performers like the BSE Bankex and BSE IT index are struggling to escape from strong bear grips. That doesn’t mean all the stocks in these sectors should be avoided. I have been posting about stocks comprising different sectoral indices – and a handful of them are bucking the trend. Those are the stocks to watch.

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