Eagle Eye Investor looks at both Macro and Micro angles. Having an Eagle Eye from above on the sector gives us an overall perspective how the group of companies with similar business might perform. Having seen the performance or out performance of the sector we can than fine tune our direction towards one or two top companies of that particular sector or the companies that look best on charts in that particular sector so that we can maximize our gains from the market.
Investor has to understand that this is not a foolproof plan of investing and lot of other things like fundamentals of the companies one is investing in and other factors should be considered before investing. However more often than not when a sector outperforms or an index outperforms others indices generally companies of that particular business segment tend to do well along with that particular index.
Vice versa if that particular sector is giving a breakdown or is sending weak signals on the chart one can decrease allocation or exit the sector or investment in the sector if needed based on the chart or fundamentals of that particular company. To do this one has to know the charts well and understand buy and sell signals on the chart pretty well. To become an expert in Techo-Funda analysis you can contact us or interact in the reply to this message.
Today we will have a look at Bank Nifty to understand this further. Below is the chart of Bank Nifty:
From the look at the chart we can understand Bank Nifty has taken support at 200 days EMA and is going towards 50 days EMA. Once Bank nifty crosses 50 days EMA there can be a very good rally seen in this particular index. The rally can be in the range of 2 to 8% is what we can assume based on the resistances seen in the form of red lines on the chart. The green lines in addition of 200 EMA are supports. Right now 50 EMA will act as a resistance but if we get a closing above this ‘Mother line’, 50 EMA might also become a support. The analysis presented here is for you to understand how support and resistances work and should not be considered for buying or selling Bank Nifty. The purpose is to provide our readers a perspective for looking always at the bigger picture. An investor should have the knowledge of Micro and well as Macro causes affecting the investment.
Having understood that Banking index might do well an investor can further have a look at constituents of this index which are Hdfc Bank, Kotak Bank, ICICI Bank, PNB, SBI, Axis bank, AU bank, Federal Bank, Bank of Baroda as well as Bandhan Bank. After having studied the technical and the fundamentals of all these companies an investor can further decide where he can make a positional or long term investment. Such an approach will definitely act as a safety net for investor. This kind of approach can also be compared to taking the second opinion of a Doctor before going for any medical procedure.
Remember that now all the stocks in an index will move equally some will move faster, some will move at the same pace, some will move slowly and some will not move at all or move negatively. You have to be smart in selection of your stocks from the particular index and you will surely be able to beat the market and Ace the Art of investing.
Disclaimer:
Investment in stocks and mutual funds is subject to market risks, please consult your investment advisor before taking financial decisions. The data provided above is for the purpose of analysis and is purely educational in nature.
