It’s the end of the month, which means we’ve got new monthly charts. Last month we discussed the strength in large-cap Financial Services, Consumer Goods, IT, and in certain areas of Pharma, while the weakest areas were mid and small-cap Infrastructure, Metals, Commodities, Realty, Media, and Autos. This post is going to discuss any significant changes from last month, but members can find the rest of the updated charts in the Chartbook.
The strength in large-caps continues, as shown by the Nifty 50 making a new all-time closing high. This month’s candle opened at the lows and closed at the highs, signaling a continuation of its uptrend after 6 months of consolidation. If prices are above 11,165 we want to be long as our next price objective us up near 15,260.
The Nifty 100 closed at new all-time highs, opening at the lows and closing at its highs. If prices are above 11,200, our price objective remains 12,640.
Midcaps on the other hand continue to trade within a range, reversing higher after making new lows early in the month. There’s still not much to do here unless prices can get back above 19,040, which would open up the possibility of retesting the year-to-date highs.
Smallcaps look similar, but made less progress than midcaps in making up for last month’s losses. If prices get back below support at 7,335, the risk of downside toward 6,245 remains open.
In terms of sectors, what’s been working continues to work. The Nifty Financial Services Index made a new all-time high. You’ll notice its chart looks very similar to the Nifty 50 because it’s the largest sector of the index. If this is hitting new highs, it’s likely we’re in an environment where we want to be buying stocks as an asset class, not selling them.
Reliance Industries Ltd. which represents roughly 50% of the Nifty Energy Index absolutely ripped this month, breaking out of an 8-month range. As long as prices are above 950, our upside target remains 1,390.
The Commodities space continues to be weak, with further downside in most metals after failed breakouts confirmed across the board these last two months. Currencies continue to trade in their multi-month ranges.
Members can view the rest of our thoughts on this month’s charts here:Lost Password?