personal finance

D-Street behaving like Team India, few Kohlis to hold fort


NEW DELHI: Just the way skipper Virat Kohli’s heroics could not save India from going 1-3 down to England in the ongoing Test series, a strong show by a couple of heavyweight stocks is failing to hold the fort for ‘Team India’ on Dalal Street.

All through the recent bull run, a few stocks were holding up the Indian benchmarks as signalled by poor market breadth even when the indices hit record high levels.

This is precisely the reason why the market’s southward journey was faster in last six sessions. This may also mean even when the market goes into consolidation, it would most likely have a negative bias instead of witnessing the usual sideways movement.

As many as 70 per cent of NSE500 stocks lost weight in the first eight months of 2018, shows a study by Elara Capital.

ELara Table

The remaining 30 per cent looked like Captain Kohli, who along with occasional cameo play from other batsmen has kept Team India competitive in England through this otherwise depressing looking series.

Another study by Edelweiss Securities suggests out of 11 sectors that Nifty500 tracks, only four were at their lifetime highs when the benchmark indices hit new peaks.

However, this has been the case in the previous lifetime highs too, which suggests investors now tend to concentrate on fewer stocks.

Data

Just 63 out the Nifty500 index companies were at lifetime highs of their own. The market breadth of NSE500 index (on a one-month rolling basis) has been worst in a decade!

Elara Capital said the number of NSE500 stocks trading below their 200-DMAs is now almost at highest level in recent past.

“Such readings are usually seen when the benchmark index has already corrected 20-30 per cent from its high point. The current situation is an exception. As many as 15 stocks from the NSE500 index have contributed 75 per cent of the recent rally in the index from its March low,” it said.

Weekly indicators show NSE500, NSE Midcap and NSE Smallcap indices are back in the overbought zone after remaining in the oversold zone for last few months. This is an ideal level from where the next big round of weakness could be seen, Elara Capital said.





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