One of the most recent developments that stands out among the sector rotation that we’re seeing is the strength in IT Stocks. We’re seeing a breakout on the NIFTY IT Sector Index and we’re seeing that IT Sector Index breaking out relative to the NIFTY500. So in other words, we’re seeing massive breakouts on both an absolute and relative basis. Those are characteristics of uptrends, not downtrends.
Today we’re focusing specifically on the NIFTY IT Index and how it’s doing compared to the rest of the market. You can see here how the NIFTY IT Index is breaking out to new all-time highs and now holding above the former highs from 2015. If we’re above that former resistance we want to be very aggressively long IT Stocks:
The bigger story, as far as I’m concerned, is the simultaneous breakout in the NIFTY IT Index relative to the NIFTY500. This relative breakout coming with that breakout in IT should spark further strength in this sector.
Premium India members, click here for a list of IT Stocks we want to buy.