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Sectors to watch - May 2020

The month of May is normally considered a "Bearish" month and "Sell in May and Go Away" is a well-known adage in the investment world. Let's check which sectors are looking interesting this month and may be next month.

Three sectors I  analysed here are Metal, Auto, and Pharma. 

Bullish Sectors: Metal and Auto
Bearish Sector: Pharma

Metal Sector:
Below is the Monthly chart of the metal sector. 
  • It formed a Double Bottom pattern and reversed from the support level. 
  • Monthly RSI is also showing reversal from support/oversold level of 30. 
  • MACD is showing Bullish Divergence. 
We may see good up-move in the coming months of May and June, especially from steel sector stocks. Keep a close watch on Jindalstel, JSWsteel, Tatasteel, and SAIL

Gann Angle:
Reversal from Weekly angle


Auto Sector:
Monthly chart observations:
  • Price reversed from the support level and from Fibonacci retracement zone of 61.8%
  • Monthly RSI reversed in "V" shape from the support level of 30. 
  • MACD is showing Bullish Divergence. 
We may see some correction or consolidation in case of fall in Nifty before up-move. Stocks to watch are Tatamotors, Escorts, Mothersumi


Pharma Sector:
Monthly chart observations:
  • Price facing resistance at 38.2% retracement of up-move from Feb-2009 to mar-2015
  • Price at the resistance of the channel
  • Monthly RSI also near resistance level
  • Price hit Monthly angle resistance
Stocks to watch Biocon, Lupin , Divislab and Sunpharma

 

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