Nifty - Labored Move and Walking on Thin ICE....

MOST OF THE BIG PRICE MOVES ARE LOST IN SEARCH OF EXPLANATION TO THOSE PRICE MOVES......

O ASHUJI.....

June-December 2012 and January 2013 - Tale of different time frame within same rally.....!!!

Nifty made low of 4770 on June 4, 2012, along with most other world markets. From the low of 4770, Nifty has rallied to around 6050 (gain of around 27%)...again like most other markets. Lets look at the stocks that participated in June-Dec 2012 rally and compare the same with stocks that rallied in Jan 2013.

Nifty Stock Performance during June-Dec 2012 and Jan 2013

1) Top Performing stocks during June-Dec 2012 have greatly under-performed Nifty in January 2013. In fact, out of top 10 gainers during June-Dec 2012 rally, 7 have registered negative return in January 2013. 

2) Top Performing stocks in January 2013 have been among the worst performing stocks during June-Dec 2012 rally. Out of top 10 gainers in Jan 2013, 2 stocks (BPCL and Infosys) registered negative returns during June-Dec 2012 rally when Nifty grew 20%. 

Top Gainers during Jan 2013....

1) Out of 21 trading days in January 2013, Nifty had 12 positive trading days. There were hardly any days  wherein banking stocks led the Nifty. Primary theme running through these gaining days was Oil&Gas stocks. Reliance Infra was frequently part of top gainers (Reliance Infra is -ve for the month now). While on most days we had stocks from Oil & Gas (ONGC, BPCL, Cairn and RIL) as part of top gainers. 

OIL & GAS - Diesel Price Hike and Volume-Price Peaks.....

1) BPCL, ONGC HPCL and GAIL peaked or made marginal highs following day from the date of announcement of price hike. RIL peaked on the day of announcement of results and since have given up all gains. 
2) Except ONGC, other stocks have corrected significantly from the day of announcement. ONGC has remained flat since day of announcement. 


Conclusion

1) Set stocks leading June-Dec 2012 rally have been among the worst performers in Jan 2013 and vice versa. This is indicative of stock rotation. 

2) Most stocks/sectors have made peaks with peak in volumes on the day of announcement of results or sector related announcement. Case in point being IT, OIL and Gas and Today could be Banking. 

3) Nifty move to highs has been extremely labored and Narrow (with different set of stocks leading to marginal highs)
4) All the above indicates more of topping process and extremely fragile market.