The charts below are the sectorial indices trading range of the NSE, representing sectors and industries for effective reading and analysing of the market’s performance on sector by sector basis. As you can see, seven of the ten sectoral indices are trading above the 50-day moving average, while others are trading below the moving averages. The sectors below 50DMA is NSE Insurance, NSE Banking and NSE Pension. NSE Premium, NSE 30, NSE 50, NSE Industrial and NSE Consumer are above the 50 DMA at the end of last Friday trading as revealed on the chart. The more sectors trading below the 50-day moving average is an indication of down trend and weak market. As most sectors have entered into its overbought region it’s expected that reversal is imminent with huge upside potential when it bounces back.
NSE BANKING INDEX
Banking index has gone back below its 50 days moving average after the earning season sentiment had trigger the positive momentum due to earnings surprises that emanated from the big five banks. The chart has shown that the banking index have been trading majorly below its 50 days MA over years due to its overregulation and influence of policies.
NSE 30 is still trading above its 50 days MA, suggesting that the blue chips stocks that made up the index are strong but there is already a reversal in trend as the index is almost crossing down the 50 DMA as at the end of trading last Friday. It also signal that traders are exiting position
The 50 days moving average is forming a support level for NSE 50 as the index has signal immenint reversal as it touches the red line. Meaning that stocks that constitute the index are resisting further decline in price.
NSE CONSUMER GOODS INDEX
The Consumer Goods index is still trading above its 50 days moving average as more of its earnings were just released recently and market players are interpreting the numbers especially to know whether to jump into the industry stocks.
NSE INDUSTRIAL INDEX
The industrial index is strongly trading above its 50 days Moving Average which by the same period in 2015 where above the 50DMA. It suggests that if you are there in the stocks that made up the sector you need to act fast and re-enter later depending on your investment goal.
NSE INSURANCE INDEX
Insurance index is trading far below its 50 days moving average as few earnings reports from companies that made up the sector were mixed as many are yet to release their scorecards, but forming a double bottom is a signal for reversal if only the expected numbers are impressive and investors are rewarded in relative to their par value prices.
NSE Oil and Gas is slightly trading above it 50 days Moving Average as the prices of the major companies in that industry are relative stable due to small number of share issue.
NSE LOTUS is trading above its 50 days Moving Average with reversal above the red line, this is indication that stocks in the index are still galloping.
NSE Pension index is trading slightly below the 50-DMA
NSE PREMIUM INDEX
Premium Index is strongly trading above its 50 days moving average, as two out-off the three stocks that constitute index had rewarded investors handsomely.