[Premium] Textiles Industry Analysis

First, let's start with an Equally-Weighted Nifty 500 Textiles Stock Index we created to track the index. Since TCNS Clothing Co. only came public in 2018, we only have about two years' worth of data for this index...but that's all we really need.

Despite the rally off the March lows, prices are still clearly in a downtrend characterized by lower highs and lower lows and will remain so until prices can break above 415.

Click on chart to enlarge view. 

And on a relative basis, the Equally-Weighted Nifty Textiles Industry Index is in a downtrend relative to the Nifty 500, which is what we're using as our measure of the broader market. Until prices can get above 0.046, this remains a downtrend and we'd expect continued underperformance from this segment of the market.

One standout of the group remains Garware Technical Fibres Ltd., which is sitting just 10% off its all-time highs and has been consolidating after reaching the price target we outlined in July's Conference Call. The stock remains in a solid uptrend, but from a risk management perspective, we only want to be long if prices are above 2,055, with a target up near 2,780.

And here's the stock making new all-time highs relative to the broader market.

A lot of the other names in the space remain in downtrends or are in the process of confirming bearish to bullish trend reversals, but they need time to prove themselves.

Two that caught our eye from a relative strength perspective were Trident Ltd. and Welspun India Ltd.

Here's Trident Ltd. trying to emerge from a multi-year base. Looks like it still needs time to get going, but one to keep an eye on.

And Welspun India Ltd. looks familiar in that it has broken one downtrend line and has reversed its downtrend, but needs to clear an area of overhead supply near 0.0083 to be completely out of the woods. An improvement for sure, but still a lot of work to do.

Overall this space is one to keep an eye on, but we don't see a ton of actionable setups for our timeframe right now.

Given we're seeing a pickup in market volatility, we need to be more selective in the areas of the market we go long and we don't see enough strength in the space to get behind it. Other areas like IT have clearer trends and better risk/reward opportunities at the moment.

Thanks for reading and please let us know if you have any questions.

Allstarcharts Team