IT SectorHello & welcome to this analysis
The relative strength of CNX IT with Nifty is indicating the likelihood of a stronger reversal.
In the monthly time frame we can see after doing a 2x Fibonacci trend extension it did a retracement up to the I H S neckline.
In the weekly time frame we can see an early stages of the probability of a double bottom formation.
Current ratio is 1.45, if it can hold on a weekly basis above 1.39 it could continue to improve with resistance coming in at 1.55. A weekly close above 1.60 opens the probability of 1.90 and 2.10. Failure to hold 1.39 would suggest further downtrend continuation.
Relative Strength is a measure of 2 tradeable assets versus each other. In this case the analysis is if Nifty rallies then IT index will rally strong and if Nifty declines IT index will decline less as long the ratios mentioned above are maintained.
All the best
