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

DAX analysis for a client

DAX Index Analysis For upto Feb 29, 2020 : Daily chart shows prices are at Strong resistance zone at upper trend line (red color). On Friday (Feb 14, 2020) it formed a Doji candle that is a sign of reversal as it formed at top and at resistance zone. So correction or reversal from this level is very likely. If prices cross above 13950 and sustains above then Breakout on upside is possible. But this looks very unlikely for at least few days as RSI indicator is also at resistance. At present it is in no trade zone. Best scenario is to wait for price to break 13600. Trade opportunities: Long Trade: Above 13950 for target of 14300. Short Trade: Below 13600 for target of 13450/13400 and below 13400 for target of 13100/13000 DAX Analysis for Swing Trade on Weekly Charts: Weekly chart shows price is at multiple channels and trend lines resistance. Trade opportunities: For few weeks or months holding Long Trade: Above 13950 for target of 14300/14800 and brea

Bullish Bets for coming week (Apr 13-17)

I have summarised my analysis in the following table. These are bullish stocks. Please do your own analysis and these are not recommendations but only for learning purposes Stock CMP Tgt 1 Tgt 2 Tgt 3 ITC 185.25 203 210 VEDL 76.8 92 96 NCC 20.15 23 26 28 RBL 120.85 134 140 SUNTV 338.3 360 365 390 CANBK 91.5 111 118 121 SBIN 187.75 194 202 211 RECLTD 89 101 106 INDIGO 1041.95 1100 1140 1160 HINDPETRO 207.85 218 223 227 Hindalco 107.55 113 127 134 CHOLAFIN 171.75 185 204 225 BHARATFORG 245.55 277 288 299 SRTRANSFIN 675.95 730 785 840 .

Bank Nifty Bigger Time Frame Analysis

I have posted following weekly chart of Bank Nifty in my Dec 15 post. This chart shows similarity in patterns. The pattern started in Aug 2013 and completed in Oct 2016 as shown below: This is "Extracting Triangle Pattern" as per Advanced Elliott Wave (Neo Wave). Ongoing pattern looks similar to Extracting Triangle Pattern and as per this pattern wave D seems to be in progress. After completion of wave D, index will move towards upward channel line(RED) in wave E. Once the pattern gets completed, we should expect index to go below wave D. I am just aware about Neo wave patterns but do not have knowledge about its calculations/counts. In Extracting Triangle pattern, each successive wave in the direction of trend contracts while corrective waves expand (wave A< wave C < wave E, wave D > wave B) It looks similar to Head & Shoulder pattern So possibility of Down move is quite high post Jan 2017.

MoneyNaad

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