Indian Stocks Need To Get IT Together

JC Parets
January 24, 2019

Tuesday I posted a mystery chart and asked you all to let me know what you would do. Buy, sell, or do nothing. Many said that it looked like the long-term downtrend was intact, but that you would wait for a downside resolution from this range before acting. I agreed.

So today, I want to reveal the full chart and share why I feel it's relevant.

The original chart I shared was an inverted daily chart of Nifty IT Index.

Here's the correct chart. What we see is that prices, consolidating above an upward sloping 200-day moving average after breaking its accelerated trend. For three months this sector has been churning sideways, unable to resolve higher despite individual components like Wipro breaking out to new all-time highs and others not far behind.

Click on chart to enlarge view.

Earlier this week we discussed the breakout in Energy and the need for all four sectors: Financial Services, Fast Moving Consumer Goods, Energy, and IT to participate to the upside if the major indexes are going to head higher.

While it looks like IT will ultimately resolve itself to the upside like Energy, bulls do not want to see it come at the expense of money flowing out of Banks and Consumer Goods stocks.

For now, that's where we're at. Mr. Market, get IT together!

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Allstarcharts Team

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