Is Indian equity headed up or down?

The half yearly ranking of Indian Indices (table) suggests we have still lower to go and Indian markets are not out the woods yet. Bank Nifty, BSE REAL, CNX100, Nifty VIX and BSEPOWER are the worst ranking assets giving signs of outperformance as they revert from worst performance. However, rest of the sector indices like Capital Goods, Health Care, Consumer Durables, Oil & Gas, BSE500, CNXIT, FMACG, AUTO, Nifty, Sensex, BSE Small Cap, BSE Metals are still near 70% i.e. top performers among a group of global assets.

This means that weight of evidence is still pointing lower suggesting that Nifty 4,000 and Sensex 12,000 might very well still be in and the ongoing negativity could extend well into end of the year. BSE500 (broad market index) is also a top performer. This does not make for a positive market case. Nifty VIX stagnating at a low also calls for more panic and volatility moving ahead. Markets can’t go up if the cycles (time durations) are pointing lower for majority of the sector indices. Markets can only go up, if CNXIT, Pharmaceuticals, FMCG, Nifty fall more and head into neutral ground, while Banking, Small cap and metals join ….

This article was written for Business Standard
Our Jiseki Time cycles are seasonal patterns of strength or weakness in assets. They are derived from percentile rankings of 0 to 100. The higher the percentile more the chance for an asset to weaken and worst the ranking, better the chance for the respective asset to outperform.
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Coverage India: CNX100 traded stocks and Indian Indices.
Michesan Anna-Maria, Head of India Research. Anna discovered her interest of markets immediately after completing her graduate studies in Economics. She followed it up with post graduate studies in corporate finance. A host of research work in behavioral finance, option strategies and quantifying market sentiment followed. Anna covers Indian equity and combines Elliott, Time Fractals and Time Analytics to deliver accuracy across time frames. To review some of her work, check out the annual India accuracy report 2009.