NSE Sectorial Indexes Trading Above 50 DMA, Support Bull Market

The charts below are the sectorial indices trading range of the NSE, representing sectors and industries for effective reading and analyzing of the market's performance on sector by sector basis. As you can see, nine of the ten sectoral indices are trading above the 50-day moving average, while only one is trading below the moving averages.  The sector below 50DMA is NSE Oil and Gas. Others NSE indices like NSE Premium, NSE 30, NSE 50, NSE Industrial, NSE Banking, NSE Insurance and NSE Consumer are above the 50 DMA at the end of last Friday trading as revealed on the chart.  The fact that more sectors are trading above the 50-day moving average is an indication of an uptrend and a strong market.  As most sectors have entered into their overbought region it is expected that reversal is imminent with huge upside potential when it bounces back.

NSE BANKING INDEX

Banking index has gone back above 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. Add these to the low valuation and expected recovery of bad debt from the oil and gas sector that had exposed the banks, especially against the recent hike in petrol price following the oil companies can start repaying.  The chart has shown that the banking stocks recently witnessed a rally and trading majorly above the 20 and 50 day MA, despite the seeming over-regulation of the sector and policies changes. Last Friday's slow down followed a massive profit taking that pulled back prices of many banking stocks. The index has broken out the first resistance level and heading for the second resistance line. 

NSE 30

The NSE 30 is trading above its 50-Day MA, suggesting that the blue chip stocks that make up the index are strong and at the same rallying on market expectation of government spending to boost market liquidity. Last minute sell off on Friday did not affect the blue chip stocks.

NSE 50

The 50 day moving average has formed a support level for NSE-50 as the index is trading above the red line which is the 50 DMA to touch the first resistance LINE waiting for breakout or down which is a function of market forces in next trading session. This is a pointer to the fact that stocks which constitute the index are appreciating in price. 

NSE CONSUMER GOODS INDEX

The Consumer Goods index is trading above its 50-day moving average as full year earnings released in late April and impressive first quarter numbers from the sector, especially the big names attracted investors and traders to the industry's stocks. There is a reversal signal as profit taking persists.

NSE INDUSTRIAL INDEX

The industrial index had just crossed above its 50 days Moving Average as the sector's stocks had recently suffered losses due to unimpressive first quarter earnings, besides the dividend cut in the previous year's account. It suggests that if you are there in the stocks that made up the sector you need to wait and new positioning depending on your investment goal.

NSE INSURANCE INDEX

Insurance index is currently trading above its 50-day moving average after a pull back below the average line but still trending down to reflect price performance of insurance stocks in this current rally in the market. The few earnings reports from this sector were mixed as many are yet to release their scorecards

NSE OIL/GAS

NSE Oil and Gas is still  trading below it 50-day Moving Average, despite the recent  rally of the sector stocks, due to a hike in petrol price, this is a pointer that stocks the industry that are yet to rally have opportunity to do so as time goes by. The sector's share prices have been stable due to their relatively small number of shares issue. 

NSE LOTUSISLM

NSE LOTUS is trading above its 50-day Moving Average with reversal above the red line. This is indication that stocks in the index just started galloping.

NSE PENSION

NSE Pension index is trading strongly above its 50-DMA

NSE PREMIUM INDEX

Premium Index is strongly trading above its 5- day moving average, as two out of the three stocks that constitute index had rewarded investors handsomely and their share prices have been on uptrend.