BSE Capital Goods- Relative Strength signaling RED FLAGS!Attached: BSE Capital Goods/ BSE Sensex Daily Chart as of 13th April 2023
The Ratio Chart has given Warning Signals of what is about to come for the Capital Goods Sector, the Warning Signals are as follows:
1) A Broadening Wedge Pattern (see the Blue Trend Lines marking the Pattern)
2) A Double Top formation within the Broadening Wedge Pattern (see the Red Curve and the 2 Down Arrow Marks)
3) Triple Bearish RSI Divergence is also visible
4) MACD is currently in Sell Mode
5) ADX is below 25 meaning range bound (this means a Trend is about to start, biased for the Downside given the other signals)
All the Signals I have mentioned are Bearish for the Chart which mean that if it comes to play then the Capital Goods Sector (including Stocks that make up the Sector) would be confirmed to be an UNDERPERFORMER for the coming 2-3 Weeks (till the Downside Target gets met on the Ratio Chart at least)
You may look at Stocks within the Capital Goods Sector for Shorting as some of them have already given Sell Signals like L&T and SIEMENS (these 2 are on my radar)
CG trade ideas
Bearish Double Top - Capital Goods Index - Expect CorrectionStraight Double Top Bearish Pattern on Capital Goods Index - Note this is on weekly timeframe
SL for shorts mentioned
All targets on the chart
Expect downside correction of 10 to 20 % over next 5 to 8 weeks
The index consists of 25 stocks - 8 FnO Stocks & 17 Cash Stocks. Constituents are -
ABB India Ltd
AIA Engineering Ltd
Bharat Electronics Ltd
Bharat Forge Ltd
Bharat Heavy Electricals Ltd
Carborundum Universal Ltd
Elgi Equipments Ltd.
Finolex Cables Ltd
Graphite India Ltd.
Grindwell Norton Ltd
Hindustan Aeronautics Ltd
Honeywell Automation India Ltd
KNR Constructions Ltd
Lakshmi Machine Works Ltd
Larsen & Toubro Ltd
Polycab India Ltd
Praj Industries Ltd
Schaeffler India Ltd
Siemens India Ltd
SKF India Ltd
Sona BLW Precision Forgings Ltd
Suzlon Energy Ltd
Thermax Ltd
Timken India Ltd.
V-Guard Industries Ltd
FnO Stocks are -
ABB India Ltd
Bharat Electronics Ltd
Bharat Forge Ltd
Bharat Heavy Electricals Ltd
Hindustan Aeronautics Ltd
Larsen & Toubro Ltd
Polycab India Ltd
Siemens India Ltd
Let's see which way the story unfolds. Happy Trading!
Disclaimer -
- The view expressed here are my personal views. I am publishing this for my own records and what I see on charts.
- If you're referring to this, please consider this ONLY FOR educational & research purposes.
- Past performance is not a guarantee for future predictions
- Any decision you take, you need to take responsibility for the same. DO NOT consider this as an investment suggestion.
- It's your hard earned money. Treat it wisely
- Trade / Invest keeping in mind your trading style, goals and objectives, time horizon & risk tolerance
- Do your own analysis and consult your financial advisor before investing.
TIA!
