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Chart Reading: Indices to watch if RBI goes for a rate cut

Here's a look at the sectoral indices that may have an impact if the RBI goes for a rate cut.

Avdhut Bagkar  |  Mumbai 

Markets, Stocks, BSE, NSE, Trade
Photo: Shutterstock.com

The decline in food prices and a cut in fuel costs helped consumer price inflation (CPI) to hit an 18-month low in December. Here's a look at the sectoral indices that may have an impact if the RBI goes for a rate cut.

NIFTY BANK: The index is comfortably trading above the significant averages – 50-day moving average (50-DMA), 100-DMA and 200-DMA, as per the daily chart. The "Golden crossover" of 50-DMA with 200-DMA has further strengthened the positive sentiment. The weekly chart shows a persistent rise in the index from the recent fall of 24,350 in October last year. The price chart clearly denotes formation of "Higher highs, higher lows", indicating a further rise towards 28,300 levels, its upper rising trendline.

NIFTY AUTO: The index is consistently trading around lower levels witnessed in October last year. Currently, it is trading around 4.50 per cent higher at 8,875 as compared to 8.30 per cent rise in benchmark index Nifty. Although, a jump of 378 points from the low of 8,497 seems stable; however, technical indicators are lagging to accomplish strong upmove as per the chart. Especially, MACD (moving average convergence and divergence), which is trading below zero line, shows negative crossover as per daily chart.

NIFTY REALTY: The index is rising steadily; however, follow-up buying has not occurred as per daily chart. Currently, the 100-DMA is acting as support located at 234.60, but the increase in volumes seems to be nil. The next support stays at 50-DMA placed around 231.50 level on the daily chart. The overall trend remains positive till index trades above 50-DMA.

NIFTY INFRA: The index is hovering around 200-DMA and 100-DMA as per daily chart. Currently, 200-DMA is placed at 3,166 and 100-DMA is located at 3,076 levels. The index has been respecting these levels of daily moving averages since last one month. Any decisive breach of same will endorse the next trend for the index, the chart suggests.

First Published: Wed, January 16 2019. 14:46 IST
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