Nifty IT View - Price,RS,Breadth
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Nifty IT is doing well from last few sessions. The price has turned bullish by breaking out the D smart(6) line. The RS chart is still below D Smart line. The broader RS chart of Nifty IT vs Nifty 50 sideways to bearish. Is this a reversal? Let's check if the breadth can give some clues.
Whenever breadth moves from Overbought to Oversold and again reaches overbought zone, it is mostly bullish. We should wait for a breadth cool off and let it come in the neutral zone. Once it is neutral zone and nifty remains bullish, we can trade Lion patterns. If the breadth cools off and doesn't visit oversold zone and reverses, there can be a clean, strong and less volatile trend.
Nifty IT zone is a buzzing sector as the breadth is 100%in terms of both X% and DT%. Since there are few signs of reversal, the ranking score has improved from negative to 30. For me, Ranking score above 50 is strong.
Short term traders can trade the breakouts with aggressive profit booking. But waiting for the breadth cool off and trading the Lion Patterns will make more sense.
