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Ratio Analysis | Investing Strategy
These 3 sectors are showing bullish signals
Upsurge Club
October 16, 2023
Hey there!
By using a simple strategy, we identified a few sectors that can outperform NIFTY50 in the near to medium term. Read on to find out which those sectors are and the strategy we used to identify them…
➡️ We used a technique called ratio analysis to identify the above 3 sectors. Ratio analysis involves comparing 2 instruments to identify their relative performance. For this, we divide the numerator by the denominator to arrive at a ratio. If the line of a ratio chart is rising, the numerator is outperforming the denominator and vice versa.
➡️ On a ratio chart, you can use all the tools that you could use when analyzing absolute price charts such as trendlines, moving averages, candlestick patterns, etc.
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📊 3 Sectors Likely to Outperform Nifty 50
1️⃣ FMCG (CNXFMCG)
A bullish hammer was recently seen near the 50-day EMA (which has acted as a good resistance) of the CNX FMCG and Nifty 50 ratio chart after ~3 months of relative underperformance.
2️⃣ Energy (CNXENERGY)
The 50-day EMA crossing the 200-day EMA followed by strong bullish candles in the CNX ENERGY and Nifty 50 ratio chart indicates new momentum.
3️⃣ India Manufacturing (NIFTY_INDIA_MFG)
The 50-day EMA is a strong support for the Nifty India Manufacturing & Nifty 50 ratio chart. If the bullish candles continue their form and break the marked resistance channel, it can indicate a buy signal.
None of the above stock ideas are intended as recommendations. Please consult a registered advisor before buying/selling.
✍🏼 If you have any questions or just want to say hi, feel free to write to us at [email protected]
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