Market Outlook and Sectors This Week
In the coming days, the Index may continue to track the upper band. It also appears to have created a broad consolidation range, with the 17,350-17,400 zone acting as support.
Pattern analysis showed that Nifty is in a steep uptrend. The breakout that occurred after Nifty crossed above the 15,900-15,950 range is very much intact.
The market looks overbought, but still, the primary trend remains intact. It is possible that the market has reached an intermediate top between 17,500 -17,790 levels.
Bank Nifty is expected to have a strong performance in the coming days, as it has been lagging relative to Nifty so far.
Sectors to Watch
Apart from this, other sectors like PSE, Auto and Realty Indices may also show resilient performance.
At this stage, it is best to avoid taking aggressive positions in the market and focus on holding what you have. A cautious approach is advised for the coming week.
In our look at Relative Rotation Graphs®, we compared various sectoral indices against CNX500 (Nifty500 Index), which represents over 95% of the free-float market-cap of all the listed.
An analysis of the Relative Rotation Graphs (RRG) showed that the IT, Smallcap, and Realty indices are outperforming the broader market. They may continue to outperform the broader market.
Nifty Pharma is languishing in the lagging quadrant. It may also underperform in the coming days. Apart from this, Media, PSU Banks, Nifty PSE, Auto and the Energy Indices are also inside the lagging indicator and the trend is likely to remain continued.
Bank Nifty Technical Outlook: Looking Stronger
Bank Nifty is in the improving quadrant. This shows that there is a good chance for an end to its relative underperformance against the broader market so far. We might see this sector put up a good show from here on.