Ratio Analysis | Investing Strategy

These 3 sectors are showing bullish signals

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.

📌 Learn ratio analysis, market cycles, and other signals that’ll help you pick a stock and know the right time to buy/sell with the Techno Funda Analysis Course for just ₹349 (use NL30 for 30% off at checkout).

📊 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]

Join the conversation

or to participate.