Nifty Heavies Revisited !

The Nifty Heavy Weights with the Best Momentum !!!

After an amazing rally to the stratospheric levels in the Diwali week, it seems that an out of the blue correction has set in, in the stock markets. It seems that equity markets all over the world are going in to the correction mode together. In case you were waiting for a correction to enter in to the stock market, the question is whether you have a stock shopping list ready ! Notwithstanding the fact that stocks  are still over priced, this analysis of the ten most important Nifty heavy weight stocks takes a look at these stocks on the basis of the recent momentum. The assumption behind this limited analysis is that the immediate momentum is liable to be persistent and on any recovery of the market, these momentum stocks will lead the rally.

Nifty and It's Heavy Weights

The top ten members of the S&P Nifty index, their weights in the index, closing prices and various daily moving averages are given in the table below. The corresponding close and the moving averages of the S&P Nifty index are also given in the table.

The last column of the above table shows the percentage value at which the last close of each stock and the index is being quoted in comparison with their respective 200 day simple moving averages ( 200 DMA ), as a simple measure of  the recent  momentum. Three other moving averages ( 20, 50 & 100 DMAs ) are also made available in the table for a better understanding of the recent momentum. Three stocks, viz. ICICI Bank, SBI and TCS were still quoting more than 20 % above their 200 DMAs as on 12th Nov. 2010 and thereby indicating the highest momentum in the sample. No wonder banking stocks were the leaders of the current upsurge even though ICICI Bank was a late entrant. The next three stocks with the highest momentum are LT, HDFC and ITC. HDFC Bank, ONGC and Infosys follow the suit and the last place is secured by the laggard,  Reliance stock.   

Now let us also checkout the charts of Nifty Index and these heavy weights for an even better understanding of the recent price action. ( Hey, it is said that a picture is  better than a  thousand words ! ).  All the charts include a regression channel showing the latest or previous general direction of the price action.  The lower panel of all these charts are showing the various DMAs. 

Nifty Heavies Revisited .. !

  A Followup on Nifty Heavy Weight Stocks ... !

In the last edition of the Nifty Heavy Weights - "Which Nifty Heavy Weight Stocks to Buy .. ?", it was recommended that  ITC is the best buy among the top ten Nifty constituents.  It was also recommended that the stocks of  SBI, LT, HDFCBANK, INFOSYS, HDFC and ONGC are also having good positive momentum warranting long positions. As expected these stocks have out performed.   Now let's have a follow up of the Nifty and it's heavy weights.

Nifty and It's Heavy Weights

The top ten members of the S&P Nifty index, their weights, rank, closing prices and various daily moving averages are given in the table below. The corresponding close and the moving averages of the S&P Nifty index is also given in the table.

ITC remains the best performer in the pack and is quoting 17 % above it's 200 day moving average (  DMA ). Infosys, HDFC, HDFC Bank and ONGC too are quoting above their respective 200 DMAs by about 10 %. ICICI Bank is the worst performer and is quoting below it's DMAs. The Nifty index is quoting above it's 200 DMA by 4.17 %. Reliance continues to trade in the trading  range between 1000 and 1100 and is quoting very near to all it's DMAs.

S&P Nifty Index - Daily Chart

The Nifty index reached it's post bear market high in the first week of April, 2010. To make the visual analysis of the charts, regression channels are drawn in the above and all the following charts to show the general direction of trade since April high. As you can see from the chart above, the regression channel of the Nifty index is still moving slightly downward.

Reliance  

Even after the favourable settlement of the gas dispute with the ADAG group and the freeing of petrol prices and a promise to free diesel prices, the Reliance stock is still trading sideways. The present trading range seems to be 1000 to 1100. The stock has been trading in a slightly wider range for almost an year. 

Infosys

Even though the stock has not reached a new post April high, it remains as one of the out-performers. Also it remains as one of the least interest sensitive stocks along with ITC in the top ten Nifty Heavy weights.

ICICI Bank    

ICICI Bank is worst performer in the top ten list. It is trading in a downward slanting regression channel. This stock is showing more weakness in comparison to the other three interest sensitive financials in the top ten list viz. HDFC, HDFC Bank and SBI. Any further weakness in the general market may see the stock revisiting the 800 - 820 range.

LT   

LT joined the performers since the last quarter's results but may be affected in a rising interest rate regime. However, as of now, this stock has good momentum and may get support at 1680 to 1700 levels.

ITC

ITC still remains the best performer and it may be accumulated on any weakness at the 275 - 285 range. This is also the least interest rate sensitive stock of the top ten list. A normal monsoon as per the latest prediction of the IMD, will add further growth impetus to the stock.

HDFC

Even thorough HDFC stock may be interest sensitive, this is one of the rarest of blue chips which performs steadily  in all kinds of interest rate regimes. This stock also remains a favourite  of the  institutional investors and may be accumulated. This stock remains a buy around the 2700 levels.

HDFC Bank

Even though HDFC Bank is trading in a flat trajectory according to the regression channel study, it remains the best bank among the top ten list. This stock can also be accumulated at lower ranges of the regression channel if available.

SBI

Even though SBI has recently been an out performer with an upward slanting regression channel, the fact remains that it is an interest sensitive stock. The stock has been performing well recently, may be, because of it's sovereign backing and the receding fears of another dip in the economic cycle. 

ONGC 

Liberalisation in the pricing of petroleum prices and consequent reduction in the subsidy burden has made this stock an out performer. This stock may accumulated at around the 1200 levels.

BHEL

BHEL has re-entered the top ten heavy weights list and TCS has gone out. This blue chip is an interest sensitive to some extent and is still trading in the downward slanting regression channel.

Conclusion

As in the previous edition, ITC remains the numero uno stock of the top ten Nifty heavy weights for investment. ONGC, Infosys, HDFC and HDFC Bank too joins the list of best stocks for investment. LT may also be counted for investment at lower levels. Therefore the best performers list remains the more or less the same with the exclusion SBI. This recommendation is issued on the back of expecting interest rate tightening by the RBI in the ensuing months. 

The above conclusion and the recommendation are on the basis of recent momentum and are subject to changes from time to time. All usual disclaimers like 'past performance may not be sustainable in the future' etc are applicable too.

Cheers and Prosperous Investing !!!

© 2010 momentumsignal.blogspot.com All rights reserved.

Disclaimer: No research, information or content contained herein or in the accompanied spreadsheet shall be construed as advice and is offered for information purposes only. We shall not be responsible and disclaim any liability for any loss, liability, damage (whether direct or consequential) or expense of any nature whatsoever which may be suffered by the user or any third party as a result of or which may be attributable, directly or indirectly, to the use of or reliance on any information or service provided. All files/information is provided 'as is' with no warranty or guarantee as to its reliability or accuracy.

Nifty Heavies Revisited .. !

   Which Nifty Heavy Weight Stocks to Buy .. ?

Even though  the Indian markets were on an uptrend on Friday when the trading ended, the western markets has fallen since then. The US markets lead the Friday's sell off. The US markets have closed at a four month low for the week. This sell off was the result of  a lower than expected job creation by the private sector in the month of May. Analysts are even questioning the sustainability of the present economic recovery without  the job growth. The Euro currency too hit a new four year low on last Friday. Hungary, a non- Euro country from Europe, too disclosed that it's financial situation is worse than what is published as has happened in the case of Greece earlier. In the light of the international turbulence, this edition of Nifty Heavies takes  a look at which stocks are  buys on the basis of recent strength, in case the Indian markets too joins the sell off.

Nifty Heavy Weights

The top ten members of the S&P Nifty index and their prices and various daily moving averages are given in the table below.    

ITC, INFOSYS, SBI, TCS and HDFCBANK seems to be the leaders of the pack on the basis of last traded prices in comparison with their 200 day moving average. The market leader RELIANCE continues to be a laggard. Recent performers like ICICIBANK and HDFCBANK as well as the IT heavies  INFOSYS and TCS seem to be loosing momentum or pausing. Therefore, a study of the individual charts of the heavies is required before coming to any conclusion.

The Nifty Index attained it's recent high in the month of April.  For an easy comparison of how  these  big Nifty stocks held up in the correction, regression channels have been drawn in all the individual stock charts starting from the previous high. The lower panel of charts also shows the various moving averages.       

Reliance 

Reliance is trading below it's major averages and the stock is still trading in the falling regression channel. Even though this stock is weak, it may be noted that the stock has been trading in a range for almost an year. The stock's recent range is between 975 to 1050.

Infosys

The Infosys reached the high in March and is correcting from thereon. However, the correction has not been very steep and the stock has been able to reach the top falling trend line of the regression channel easily. Besides, it has traded above all it's major daily averages making it one of the perennial favorites.

ICICI Bank   

ICICIBANK has certainly lost it's momentum in the recent correction, even though this stock was one of the earlier leaders. The stock is trading below it's major averages and has just reached it's 200 DMA in the current recovery. It has not been able to test the falling trend line of the rather steep regression channel indicating weakness.

Larsen & Tubro

One of the earlier laggards, LT is one of the stocks which has reached a new high recently. Even though the LT stock is quoting at just 5 % above it's 200 DMA, this is one of the strongest stocks on the basis of recent performance. 

ITC 

ITC is the best performing Nifty Heavy weight stock at present. It has declared very good results for the last financial year and is quoting cum dividend ( Rs.10 ) at present. On the basis of the recent performance, ITC is the best Nifty heavy weight stock compelling investment on a correction. This stock may be bought at around the 270 levels for investment.

HDFC  

HDFC is one of the perennial favorite stocks of the Indian market and it has stood up reasonably well in the correction. It took support on it's 100 and 200 DMAs at 2630 in the correction.  Even though, the stock is still trading in the falling regression channel, it is mostly trading sideways.

HDFC Bank

Even though the private sector peer ICICIBANK corrected more, HDFCBANK has stood up reasonably well in the correction.   The stock took it's support on the 100 DMA at 1810 and has  traded above the falling trend line of the regression channel. The HDFCBANK stock has reasonable strength even though it has not retained it's high momentum.

SBI    

The SBI stock has been one of the surprising performers of the recent recovery. This is the only stock with an upward sloping regression channel in the sample. The stock has outperformed even in the face of a below average result and an impending hike in interest rates. The sovereign backing seems to the trump card here. Whatever the reason, SBI is one of the recent best performers. 

ONGC 

ONGC entered the top ten list only in the last wee's edition. The stock has regained it's momentum after the government's decision to raise the administered prices of natural gas and further liberalisation of market linked prices. The stock is trading with good momentum and is candidate to the buy list. 

    

TCS

Like it's IT peer INFOSYS, TCS stock too hit it's high in March and is correcting now. The stock took it's support at the 200 DMA at 695 and has recovered to the falling trend line of the regression channel. However, the stock has not been able to trade above it's 50 and 100 DMAs placed at the 770 levels.   

Conclusion

ITC is selected as the best stock for investment. SBI and LT too joins the list on the basis of the recent performance. Other stocks which may be considered for investment are HDFCBANK. INFOSYS, HDFC and ONGC.

The above conclusion and the recommendation are on the basis of recent momentum and are subject to changes from time to time. All usual disclaimers like 'past performance may not be sustainable in the future' etc are applicable too.

Cheers and Prosperous Investing !!!
 

© 2010, momentumsignal.blogspot.com. All rights reserved.

Disclaimer: No research, information or content contained herein or in the accompanied spreadsheet shall be construed as advice and is offered for information purposes only. We shall not be responsible and disclaim any liability for any loss, liability, damage (whether direct or consequential) or expense of any nature whatsoever which may be suffered by the user or any third party as a result of or which may be attributable, directly or indirectly, to the use of or reliance on any information or service provided. All files/information is provided 'as is' with no warranty or guarantee as to its reliability or accuracy.

Nifty Heavies Revisited .. !

 Nifty Futures

Nifty futures had a roller coaster ride last week. From a high of 5023 on Monday,  it recorded a low of 4786 on Tuesday. It gained on the last three days of the week to reach a high of 5055 on Friday. It closed at 5037 for the week. As the trading has been entirely based on international cues, any prediction has become useless. Therefore, lets try to understand what the market has done and why. 

The Indian market has been able to reasonably withstand the the onslaught of the bears recently unlike in the past. In the past, our market used to be more volatile than it's western counterparts. The reason for this positioning is none other than the better macro economic growth story offered by the Indian economy. However, any further deterioration of the  European soveriegn debt debacle may still affect our markets. 

Nifty Weekly & Weekly Moving Averages Chart  

The Nifty future is supported by the 50 WMA at 4918. The Nifty futures is still trading below its short term  weekly moving averages. The 5, 10 and 20 week moving averages are at 5065, 5186 and 5092 respectively. These short term averages may act as resistances.

Nifty Heavy Weights

The top ten members of the S&P Nifty index and their prices and various daily moving averages are given in the table below.    

Reliance

The most important Nifty constituent, Reliance is still trading  sideways even after the favourable court verdict. The stock is still trading very near to it's 200 DMA. The trading range remains confined to the 975 to 1100 range. 

Infosys

Even though Infosys stock has been correcting from the April highs, there has not been any damage to it's charts. it remains one of the strong pivotals.

ICICI Bank

After the somewhat disappointing results announced by the ICICI Bank, the stock has corrected and the out-performance has been lost. The stock is trading around the 200 DMA at 865.

Larsen & Tubro

After the declaration of the better than expected results, the LT stock has regained performance. It has started  showing higher strength  in the weak market. The stock is trading above it's short and  long term moving averages.

ITC

ITC declared good results and has broken out of it's consolidating pattern. ITC is one of the rare stocks which is trading at a new high at present. The stock may be bought on correction at around it's breakout level of just above the 270 level. The stock is trading above it's major moving averages.

HDFC  

HDFC stock has stood without much damage in the present correction. This stock is also trading above it's major moving averages.

HDFC Bank

HDFC Bank has been one of the out-performers which corrected recently. It reached it's previous high area of 1800 - 1830 area and has traded upwards. However, the stock is still trading below it's 50 DMA at 1918.

SBI 

SBI stock has withstood the correction even after declaring below the expectations results. May be the sovereign backing  of the bank is helping it in these uncertain times. 

ONGC

The ONGC stock which has been on a correction mode for some time has been the new surprise entry to the top ten heavy weights. The natural gas price hike by the government has been the reason for the stock's strength. However, the rally may strengthen only after it closes steadily above it's 200 DMA at 1135.

TCS

TCS stock has corrected and taken support at the 200 DMA at 693. It may have resistances at the 100 and 50 DMAs at 770 - 780 levels. These moving averages acted as it's support earlier.

Cheers and Prosperous Investing !!!


© 2010 momentumsignal.blogspot.com All rights reserved.

Disclaimer: No research, information or content contained herein or in the accompanied spreadsheet shall be construed as advice and is offered for information purposes only. We shall not be responsible and disclaim any liability for any loss, liability, damage (whether direct or consequential) or expense of any nature whatsoever which may be suffered by the user or any third party as a result of or which may be attributable, directly or indirectly, to the use of or reliance on any information or service provided. All files/information is provided 'as is' with no warranty or guarantee as to its reliability or accuracy.

The Nifty Heavy Weights

  Nifty and It's Biggest Constituents

Last week was an eventful one for the markets. The Nifty futures actually closed with a gain of some 37 points. However, let's check out the real market action for the past week. The market opened higher on back of the shock and awe European bailout plan on Monday. On Tuesday, the markets tested the Monday's low of 5080 too. Therefore, the markets were expected to test the high of 5108 and the high was tested on Thursday. However, Friday's trading has proved that the markets have failed in its test of 5210 - 5220 range. The proof of the failure is that the futures traded lower and closed below 5080 which was the low on Monday. On the weekly charts, last week's action has lead to the formation of a shooting star or inverted hammer candle which indicates further weakness ahead. 

Nifty Futures - DMA & ATR Chart

The Nifty future has closed below it's 100 DMA for the second week in succession. It may test the 200 DMA at 2975 in the coming week. The 200 DMA also coincides with the future's previous low of 5076. The second panel in the chart above shows the various averages of the True Range of the futures in points. It can be observed from the chart that the TRs increase normally when the market falls and it decreases when the markets rally. The TR has started to increase and it is above it's long term averages at present.  Therefore, traders may expect higher volatility on a day to day basis.

Nifty Heavy Weights - Weightage, Close & DMAs

LT is trading below all of it's DMAs. Reliance and BHEL are trading below their short term DMAs but very near to their 200 DMAs. HDFCBANK, SBIN and TCS are still trading above their 200 DMAs by more than 10 %. INFOSYS, ICICIBANK, HDFC, and ITC are trading above their 200 DMAs less than 10 %. The out performance of these share are also slackening  which may be indicating technical weakness.

Today's edition includes the charts of all the Nifty heavies too. All charts include the price panel as well as the various DMAs panel. Please note that the price panel also includes the regression channel. The center line of the regression channel  shows the trading direction of the instrument for the selected period of the chart. These charts include the trading history of about six months.

Reliance - Daily & DMA Chart

Infosys - Daily & DMA Chart

ICICIBANK - Daily & DMA Chart

LT  - Daily & DMA Chart

 

HDFC - Daily & DMA Chart

ITC  - Daily & DMA Chart

HDFCBANK - Daily & DMA Chart

  

SBIN - Daily & DMA Chart

TCS  - Daily & DMA Chart

BHEL - Daily & DMA Chart

Here is the conclusion of this post which is quoted from the last Nifty Heavies edition !

"Since the present downtrend has multiple reasons and is spread all around the world, traders and investors may wait for some time to get some clear signals to go long on the market."

Cheers and Prosperous Investing !!!   

© 2010 momentumsignal.blogspot.com All rights reserved.

Disclaimer: No research, information or content contained herein or in the accompanied spreadsheet shall be construed as advice and is offered for information purposes only. We shall not be responsible and disclaim any liability for any loss, liability, damage (whether direct or consequential) or expense of any nature whatsoever which may be suffered by the user or any third party as a result of or which may be attributable, directly or indirectly, to the use of or reliance on any information or service provided. All files/information is provided 'as is' with no warranty or guarantee as to its reliability or accuracy.

The Nifty Heavy Weights

 Nifty's Biggest Constituents Revisited....!

Readers might remember that this blog had pointed out the doji candle in the monthly chart of the Nifty futures and the not so good performance of the biggies in the last Nifty Heavy Weights post.  We  also opined that a significant correction may be around the corner. As the market in the process of a  significant correction as expected, a revisit to the Nifty heavy weights has become mandatory. 

 Nifty Futures- Monthly Chart

As you can see from the chart, The Nifty futures has broken the April month low of 5162 during the last week. All major international markets are also in the downtrend at present. The 20, 50, 100, and 200 DMAs of the Nifty futures are at 5239, 5198, 5120, 4954 respectively. The Nifty Futures is trading between it's 200 DMA at 4954 and the 100 DMA at 5120.  These two DMAs may give support and resistance to futures in the immediate future. ( Please see the Moving Averages chart in the next post. )

 Nifty Heavy Weights - Weightage, Close & DMAs

Reliance stock is still trading below it's major moving averages even after the favorable judgment in the Reliance - RNRL gas row. LT is also trading below it's major DMAs. The banking and IT bellwethers are comparatively strong as seen from their prices in comparison with their DMAs.

Since the present downtrend has multiple reasons and is spread all around the world, traders and investors may wait for some time to get some clear signals to go long on the market. In the meanwhile, the market may make small rallies as it has fallen too much in too short a time. For example, it has fallen continuously for the past five trading sessions. Therefore it may make some positive closes also shortly.

Cheers and Prosperous Investing !!!   

© 2010 momentumsignal.blogspot.com All rights reserved.

Disclaimer: No research, information or content contained herein or in the accompanied spreadsheet shall be construed as advice and is offered for information purposes only. We shall not be responsible and disclaim any liability for any loss, liability, damage (whether direct or consequential) or expense of any nature whatsoever which may be suffered by the user or any third party as a result of or which may be attributable, directly or indirectly, to the use of or reliance on any information or service provided. All files/information is provided 'as is' with no warranty or guarantee as to its reliability or accuracy.