Top Sector to Watch: Bearings – Punekar News
Foreign Institutional Investors (FIIs) have been selling off their investments in the Indian equity markets for the past two months. After withdrawing a significant Rs. 1.14 lakh crore in October, they pulled out another Rs. 46,000 crore in November. This trend has raised concerns and cast a shadow of uncertainty in the markets. Despite this gloomy picture, there have been some rays of hope in specific sectors that have caught investors’ attention.
In November, the overall FII activity remained negative, but certain sectors showed resilience and saw increased trading volumes. This surge in trading activity could indicate an emerging trend in these sectors, hinting at potential opportunities for investors even in challenging market conditions.
By using the Sector Volume Scanner available in RZone and TradePoint, we discovered that three sectors, including Bearings, were trading above their average volumes. This heightened activity suggests that there may be a shift or a new trend in these sectors, offering a silver lining amid the general air of caution.
Taking a closer look at the Bearings sector, we found that the Definedge Equal Weighted Bearings Index displayed a Bullish Gartley Harmonic pattern on its daily chart. This pattern, based on Fibonacci levels, indicates a possible upward movement in the sector after a period of decline. It provides traders with a potential signal to explore opportunities in a market that is otherwise showing weakness.
Moreover, the positive divergence on the Relative Strength Index (RSI) further reinforces the case for a potential reversal in the Bearings sector. The RSI’s positive divergence, where the price makes new lows but the RSI forms higher lows, suggests that selling pressure is decreasing, increasing the likelihood of a market turnaround.
While the overall market remains cautious due to ongoing FII outflows, the sector-specific analysis for November brings some optimism. The Bearings sector, in particular, shows promising signals of a potential reversal, supported by the Bullish Gartley pattern and positive RSI divergence.
It’s essential to note that this article is for educational purposes and presents interesting charts and data points, not trading recommendations. As per SEBI guidelines, the writer and his dependents may or may not hold discussed assets, and Definedge clients may have varied holdings.
