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Inter Market Analysis

Inter market analysis is a series of articles studying related segments of the market to identify lead lags between trends in each segment. This can often forewarn you of impending changes in trend and allow for planning of required action based on it. For example midcaps v/s large caps, currencies v/s commodities and US markets v/s European markets and so on. In a global environment inter-market relationships are not restricted to a country but between countries and their respective asset classes as well.

BSE Healthcare

BSE Healthcare - is the only performing defensive sector. For the sake of my bearishly biased view right now I am looking at where this one will stop, or can I see something, after all all sectors should give up in the Kondratieff winter phase, irrespective. So the chart below shows wave 5/5 starting from 2012 and rising in a channel, the movements from June 2013 onwards fit a ending diagonal in the Vth wave of 5/5. Prices have still not touched the upper line of the wedge at 10500, but truncation cant be ruled out. So if we do get a reversal in this sector as well this should be the pattern in play. The lower line of the wedge is at 9770 for confirmation of a bearish break.

hc100114

Realty Index

BSE Realty index in the long term should have started its  next worst leg down. The index formed a triangle that I was earlier marking as wave 4 but have started from scratch again as shown in the second chart and marked as X.

The break down from the triangle means that the August low will soon break, in the final move of the bear leg.

 real100114

The long term monthly chart shows a break down from a descending pattern. The recent x wave tried to go above the neckline and failed so failure should mean achieving the target of the descending pattern near 570 from 1348 currently, that is a huge anticipated drop in prices for realty stocks.

real100114a

FMCG -Safe Spot?

The BSE FMCG index has been one of the weakest performers. There is no defense in buying FMCGs right now if we go by the index below. It is in wave III of C that will hed to 6000 or lower, 6628 being the resistance from the 20wma that is not getting crossed. 

 fmcg020114

The weekly chart sports a perfect H&S structure. The neckline is at 6229, a break below which on closing basis would mean we are heading to 5510-4762 targets. 

 fmcg020114a

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