How to recognise the strong sector?

Widely practised method is that to check the relative strength against the market. Here is the performance of each sector since nifty started falling. We can fairly accurately conclude that, we must look at PSUBANKS, METALS, AUTO

1/11

But how about the sectors such as healthcare, sugar, chemicals etc. These have no respective sector charts. How do u assess the strength in these.

Answer is to check the relative performance. Here is an example chart of health care stocks in NSE500 universe.

2/11
How do u see this?

Majority of the health care stocks are falling below the market. Its just one stock; NArayana Hridayalaya which outperforms the market. Surely its a "DO NOT TOUCH" sector

3/11
Here is how paint industry is faring at present. How do u see this?

Obvious to see majority of the stocks are underperforming the thick blue line (which is Nifty). With such as overal trend, its better to avoid such stocks.

4/11
Here is Beverages stocks & their relative performance to each other & against nifty. Trend is so obvious. Most stocks are falling much lessser than nifty.
In such adverse conditions, hollow stocks with brittle demand are prone to make steep fall. If they do not, its demand

5/11
Its the Relative performance chart of Hospitality stocks. Once again, this is a setor to watch out. They are far stronger than majority of the sectors in the market and also against the market trend.

6/11
Criteria:

1.
Just look at how the stocks are performing. If 2/3rd of the stocks are performing better than market, its a very good sector to bet upon.
2.
Another point is to check where the leaders in the sector lies. Few of them should be there abv market

7/11
NSE500 stocks are the best to keep as ur scannning universe. They contain all the quality stocks out there. And also cover all the sector with fair number of stocks and also contain enough examples from small, mid and large caps. Nifty100 etc may not be enough

8/11
Relative performance is the trick big twitter handles or TV analysts uses to predict the next winning sector. U must have heard them declaring chemicals or sugear sector as the potential watchout sectors 2020-21.

9/11
Beverages and Hospitality are the examples i shared here. There other few ones too. I leave them to u. U may want to check out Power, Textiles and Sugar sectors for this purpose. On the contrary, u can see why should not bet on Tyre stcks too in thesame way.

10/11
I intend to bring out lesser know concepts in trading regularly. But that wont sustain if the public demand isnt good in it. Like & Retweet the thread in that regard.

11/11

More from Aneesh Philomina Antony (ProdigalTrader)

More from Screeners

You May Also Like

https://t.co/6cRR2B3jBE
Viruses and other pathogens are often studied as stand-alone entities, despite that, in nature, they mostly live in multispecies associations called biofilms—both externally and within the host.

https://t.co/FBfXhUrH5d


Microorganisms in biofilms are enclosed by an extracellular matrix that confers protection and improves survival. Previous studies have shown that viruses can secondarily colonize preexisting biofilms, and viral biofilms have also been described.


...we raise the perspective that CoVs can persistently infect bats due to their association with biofilm structures. This phenomenon potentially provides an optimal environment for nonpathogenic & well-adapted viruses to interact with the host, as well as for viral recombination.


Biofilms can also enhance virion viability in extracellular environments, such as on fomites and in aquatic sediments, allowing viral persistence and dissemination.