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

Comments

VIX Analysis

The daily VIX chart shows the formation of Doji candles at the bottom and reversal. The daily RSI crossed the previous resistance level of 40. The MACD signal gave bullish crossover suggesting bullish move in VIX. So the daily chart shows the possibility of VIX moving towards 28 levels in the coming days. The weekly chart shows the formation of wedge and reversal from the bottom. VIX may move towards the upper wedge line @ 29-30. So VIX suggesting the bearish mood of the market and hence the high possibility of fall in Nifty-50 and Banknifty in the coming days/weeks. VIX Gann Box: The daily Gann Box shows a reversal from the mid-zone of time factor points. The next time factor date is Jul-21. So will VIX continue to move high till Jul-21 or it will reverse from angle point? Wait and watch. Using VIX to spot Intraday Reversal on Indices: VIX is a very useful indicator to spot reversal during day trade. If the price of an index moves up and @ resistance zone watch values of VIX. If VIX s...

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BankNifty Update For Jul-09,2020 - Weekly Expiry

Banknifty opened Gap up @ 22700 and then achieved all our bullish targets of 23900/23000. But the upmove was very choppy and looked like terminating pattern and was not easy to trade. So I did not take a trade on the upside. My observation was Banknifty good up (250-300 points) while Nifty was not at all moving up and was just 10-15 points up and VIX was increasing. That was a signal that there is a high probability of reversal. (I twitted this around 12.30 pm). Banknifty continued its upmove and VIX was not falling, so I was sure that reversal is on the card from the strong resistance zone of 23900-23000/50. In yesterday's post, I mentioned about daily RSI @ resistance. That was another reason I was expecting a high probability of fall after it moved higher levels to come to at least yesterday's close levels or below. I got down-trade from almost 23000 to 22700 (got out earlier as it was intraday and not much time left though I was expecting at least 22600. It gave a much lowe...

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