Rajandran R Follow Telecom Engineer turned Full-time Derivative Trader. Mostly Trading Nifty, Banknifty, USDINR and High Liquid Stock Derivatives. Trading the Markets Since 2006 onwards. Using Market Profile and Orderflow for more than a decade. Designed and published 100+ open source trading systems on various trading tools. Strongly believe that market understanding and robust trading frameworks are the key to the trading success. Writing about Markets, Trading System Design, Market Sentiment, Trading Softwares & Trading Nuances since 2007 onwards. Author of Marketcalls.in and Co-Creator of Algomojo (Algorithmic Trading Platform for DIY Traders)

Is the Nifty IT Sector OverValued?

April 12, 2016 28 sec read

Nifty IT (Previously CNX IT) hit is bear market low at 1992.8 on 6th March 2009 since then its journey towards the upside move had generated more than 5.5x returns in the last 6 years. But in the way of its bullish journey it left so many gaps open and remain unfaded. Total 11 gaps are yet to be faded as shown in the above charts. Gap reflects the emotions from the market participants.

So many gaps left open in Nifty IT indicates that too many emotional buyers willing to buy and hold stocks in this segment at higher price and high probability that Nifty IT(CNX IT) is highly overvalued. May not be a long term bet at this point.

Note : NIFTY IT peaked on 6th Mar 2015 and made a high of 12908

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