Will BANKS Blast and OUTPERFORM Nifty in the coming YEARS?
The CHART is self explanatory....Bollinger bands gives us an idea of volatility in the coming months and the trendlines as you know gives idea about the resistances for the coming month and years
By looking at the chart RSI of BN is also below 60 in monthly chart and it has followed the trendline so religiously...so it is little tough to break the trendline...But investors will look BN at 30600 levels as a very good monthly support and we should expect a bounce back from those levels...If BN breaks the trendline like NIFTY 50 did in APRIL...it will outperform NIFTY 50 in the coming months and years...
Below is chart of NIFTY 50 which has broken the multi year resistance UNLIKE BN
Now the question arises why have I used LOG chart instead of ARITHMETIC chart in this analysis...The results are different for arithmetic and log chart
The below image will make it clear:
If it's still not clear I have an example for you:
if a stock jumps from 1-2 it is a 100% rally and from 2-3 it is not a 100% rally...but the arithmetic chart shows both are equal...whereas the log chart shows both are different
In a LOG chart the same difference is liked with same percentage while in arithmetic chart it is linked with arithmetic difference of both the numbers
I hope this makes it clear for you...Thus,LOG charts are more accurate in the long run and to analyse a stock or an index in long run (MONTHLY CHART).
If you want me to make such analysis for various other sectors an stocks on a monthly time frame do let me know in the comments...FOLLOW me for more such content ahead...Till then,
HAPPY TRADING :)
By looking at the chart RSI of BN is also below 60 in monthly chart and it has followed the trendline so religiously...so it is little tough to break the trendline...But investors will look BN at 30600 levels as a very good monthly support and we should expect a bounce back from those levels...If BN breaks the trendline like NIFTY 50 did in APRIL...it will outperform NIFTY 50 in the coming months and years...
Below is chart of NIFTY 50 which has broken the multi year resistance UNLIKE BN
Now the question arises why have I used LOG chart instead of ARITHMETIC chart in this analysis...The results are different for arithmetic and log chart
The below image will make it clear:
If it's still not clear I have an example for you:
if a stock jumps from 1-2 it is a 100% rally and from 2-3 it is not a 100% rally...but the arithmetic chart shows both are equal...whereas the log chart shows both are different
In a LOG chart the same difference is liked with same percentage while in arithmetic chart it is linked with arithmetic difference of both the numbers
I hope this makes it clear for you...Thus,LOG charts are more accurate in the long run and to analyse a stock or an index in long run (MONTHLY CHART).
If you want me to make such analysis for various other sectors an stocks on a monthly time frame do let me know in the comments...FOLLOW me for more such content ahead...Till then,
HAPPY TRADING :)
