Nifty Vs Bank Nifty Ratio Charts

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Nifty Vs Bank Nifty Ratio Charts

by Rajandran R

Nifty Vs Bank Nifty Ratio Charts

1 of 5

26/08/2013 22:55

Nifty Vs Bank Nifty Ratio Charts

http://www.marketcalls.in/trading-lessons/nifty-vs-bank-nifty-ratio-char...

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In my last post about Nifty and Bank Nifty Positional charts i had spoken about price divergence between nifty and bank nifty. But the question that comes to your mind is how one can understand that price divergence is happening between two underlying instruments? And how to benefit from the price divergence? The answer is ratio charts. What information we can get from ratio charts? 1)The above charts shows the ratio charts between bank nifty and nifty. Decreasing ratio charts indicates bank nifty is underperforming nifty in terms of price. And a increasing ratio indicates banknifty is outperforming its benchmark index. From the investment point of view ratio charts are often used across Sectors to identify sectors with relative weakness in a measure against the benchmark index so that you can avoid yourself investing your money in sectors that are likely to underperform with respect to the benchmark index. 2)Pair Traders often use ratio charts to identify low risk opportunities. Since Apr/May 2013 the Bank Nifty/Nifty ratio charts moved from 2.10 to 1.74 which indicates bank nifty underperforms nifty in terms of price performance. Even though bank nifty had taken a huge downside fall and nifty relatively havent lost its equal weight. So pair traders in this case often long nifty and short bank nifty to execute low risk strategies with controlled risk. And they do reverse their strategies when the banknifty/nifty ratio starts likely to decline from the peak. The below mentioned EOD charts shows ratio charts various sector indices with respect to nifty as benchmark index in Indian markets which updates on EOD basis. NIFTY CNXAUTO CNXFINANACE CNXMETAL CNXPSUBANK INDIAVIX BANKNIFTY CNXCOMMODITIES CNXFMCG CNXMIDCAP CNXREALTY NIFTYJR CNX100 CNXCONSUMPTION CNXINFRA CNXMNC CNXSERVICE NIFTYMIDCAP50 CNX200 CNXDIVIDOPPT CNXIT CNXPHARMA CNXSMALLCAP SENSEX CNX500 CNXENERGY CNXMEDIA CNXPSE DEFTY

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26/08/2013 22:55

Nifty Vs Bank Nifty Ratio Charts

http://www.marketcalls.in/trading-lessons/nifty-vs-bank-nifty-ratio-char...

Larsen and Tubro recently made a quicker retracement below the GANN support zone 1650 and still sustaining below that. Which indicates a bearish picture. Ideal trade is to get out of longs for ti...
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Rajandran is a trading strategy designer and founder of Marketcalls, a hugely popular trading site since 2007 and one of the most intelligent blog in the world to share knowledge on Technical Analysis, Trading systems & Trading strategies. More From Rajandran R
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Vicky

August 1, 2013, 8:12 am (4 weeks ago)

Dear Rajandran Sir, Please advise site to see above type ratio charts as I would like to see few more pairs. Thanks. Reply Malleswara Rao BVVN August 7, 2013, 8:55 am (3 weeks ago)

Dear Rajendran, i think Ratio charts are good for positional pair trading. what are the settings for super trend for EOD charts? Reply Rajandran R August 7, 2013, 9:28 am (3 weeks ago)

Factor=3 and Multiplier=7 and for tighter stops one can use Factor=2 and ATR=11 Reply Malleswara Rao BVVN Thank you sir. Reply August 7, 2013, 10:41 am (3 weeks ago)

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Nifty Vs Bank Nifty Ratio Charts

http://www.marketcalls.in/trading-lessons/nifty-vs-bank-nifty-ratio-char...

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Nifty Vs Bank Nifty Ratio Charts

http://www.marketcalls.in/trading-lessons/nifty-vs-bank-nifty-ratio-char...

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+Rajandran R
Rajandran is a Market Analyst and founder of Marketcalls, one of the most intelligent blog in the world to share knowledge on Technical Analysis, Trading systems & Trading strategies.

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