Bharti Airtel & Telecom Stocks Charge Higher
First, let's check in with Bharti Airtel. The stock breaking decisively above 500 was our trigger to get long as that signaled a successful decade-long base breakout and beginning of a new long-term uptrend. As long as the stock is above 500, that thesis remains intact with an initial target near 660.
Click on chart to enlarge view. 
Now, let's look at our Equally-Weighted custom index of the six stocks in the Nifty 500 that are classified under the Telecom Industry. By equally-weighting the constituents, we can get a more accurate representation of what the average stock in the industry is doing. Cap-weighted indexes skew too heavily towards the largest stocks and often mask the underlying behavior of the rest of the index (i.e. the Nifty Energy Index), so we use these custom indexes to level the playing field and give smaller stocks the representation they deserve.
Below we see the Equally-Weighted Telecom Index approaching its 2013 lows in April as momentum diverged positively, suggesting sellers were becoming exhausted as prices tested a potential long-term support level.
Now that prices have confirmed this level as support, we've transitioned from a downtrend to a sideways trading range...which is the first step in a successful bearish to bullish trend reversal. While we don't expect this transformation to occur overnight, it is certainly encouraging action so far.
The second chart is very interesting. Here we're looking at our Equally-Weighted Telecom Stocks Index relative to the Nifty 500 and see prices meeting their downside objective last November, retesting that level in March as momentum diverged positively, and now breaking above the downtrend line from their 2018 highs. Also, note that momentum is getting overbought for the first time in several years.
This is a big development and suggests that we should continue erring on the long side of Telecom stocks as a group. Clearly Bharti Airtel is the leader, but we shouldn't sleep on its peers that are perking up as well. Our bet is that a year from now we'll be looking at more than just Bharti Airtel at the top of the 52-week highs list.
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Allstarcharts Team