RRG charts – weekly relative performance shows that more sectors are likely to underperform in the medium term (2-3 months). Probably stock picking is not going to be a easier game for the next two months. Sectors like Consumption and Realty sectors are underperforming largely relative to the benchmark index Nifty 50.
Avalanche of sectors Nifty Auto, Nifty MNC, Nifty Media, Nifty Energy, Nifty Metals, CPSE, Nifty PSU Bank , Nifty Commodities, Midcaps and Small caps stocks are likely to underperform relative to Nifty 50. Hence stock picking might not be a easier game even if the broad indices are showing strength.
Very few sectors like Nifty IT, Nifty Service, Nifty Infra are expected to outperform in the medium term relative to Nifty.
Nifty 50 Relative to S&P 500
Nifty 50 is more likely to underperform in the first quarter of 2017 as well as both RS-Ratio and RS-Momentum are declining on weekly timeframe which indicates a potential & more significant relative under-performance in the future.