Heckyl Sentiment Index for Nifty in bullish territory

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Heckyl Sentiment Index for Nifty regained strength and moved back into bullish territory, indicating the recent rally in the 50-share index may continue in the near term. The Modi government’s Rs 9-trillion plan to boost economy fueled optimism in the market and has sent the broad based Nifty to a record high level during the past week.

Heckyl has developed a Sentiment Index to track the sentiment around the market based on news development. This index analyses the potential impact of the sentiment on the value of Nifty index. This is done through an analysis of the news flow on the Nifty companies in real-time.

Our back-testing has indicated a strong positive correlation (0.80+), implying that the Heckyl Sentiment Index is an alternative proxy for the 50-share index.

Sentiment Index for Nifty regained strength  (Image 1) after the Modi government decided infuse Rs 2.1-trillion as capital in the ailing public sector banks. Moreover, the government’s plan to spend whopping Rs 7-trillion on the road projects also lifted the sentiments.

During the last week, the Nifty moved up 1.70 percent, while the 30-share Sensex surged 2.40 percent.

Nifty Sentiment Index
[Image 1: Heckyl Sentiment Index versus NSE Nifty Index]

The Sentiment Index indicates bullish/bearish signals based on the crossover of fast and slow moving averages of the daily values of sentiment index.

Bullish signal: When short-term sentiment (30-day average) rises above long-term (90-day average), green shading indicates likely uptrend for the Nifty.

Bearish signal: When short-term sentiment (30-day average) falls below long-term (90-day average), pink shading indicates likely downtrend for the 50-share index.

Heckyl Sentiment Index showed extreme optimism in the banking stocks (Image 2). Banking stocks gained on the hopes the government’s recapitalization will improve the balance sheet of PSU banks. Nifty Bank rallied 3.45 percent in the past week.

Nifty Bank Sentiment Index
[Image 2: Heckyl Sentiment Index versus Nifty Bank Index]

Heckyl Sentiment Index is very useful tool to get early indication of upward/downward movement for Nifty. At the same time, traders/ investors can also spot opportunities by identifying market patterns and bubbles ahead of time.

To know more about Heckyl News and Sentiment Analytics platform, email us at info@heckyl.com

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