The chart I am plotting here is the ratio chart between FMCG & Auto Sector. The logic is that during good times Discretionary sector does well & In Bad times Investors hide into consumer staples. As this chart is suggesting FMCG sector is at an record low compared with Auto Sector & has just begun to outperform which is an indicative that one should be cautious....
FMCG sector has been under tremendous pressure. In last week it showed some signs of recovery but it was just a profit booking (I suppose).... now last candle compleed a classic evening star doji pattern which is a warning sign... FMCG sector may show further weakness and even it may violate previuos low....
FMCG Index took support of 200 EMA and showing bullish signs.
Even if it comes down again towards 200 EMA that will present a fantastic oppurtunity to go long on FMCG Stocks as it will create a double bottom for short term.
I would look to enter the shares mentioned on the charts for Longs till CNX FMCG index does not break the recent lows.
