ChartTalk: A Major Shift in US Yields Is Underway

ChartTalk: A Major Shift in US Yields Is Underway

by | Sep 13, 2026 | ChartTalk

For much of the past decade, investors have been conditioned to view interest rates through the lens of the Federal Reserve and short-term policy rates. That framework is becoming less sufficient. The more important signal today may be coming from the long end of the US Treasury market, where 10-year, 20-year and 30-year yields are moving toward levels that could materially influence the valuation and risk appetite on investors.

The backdrop is now changing as the US 10-year Treasury yield approaches the 5 percent mark, a level not meaningfully exceeded since 2007. More importantly, the recent move has followed a breakout from a continuation pattern, keeping the underlying trend firmly upward

The US 30 year yield presents an equally important picture. It has moved to its highest level in nearly two decades and is now testing, and marginally exceeding, an important historical resistance zone.

Taken together, these charts suggest that the long secular decline in US yields has reversed. The important point is not simply that yields are high, but that their structure has changed. The lows formed in 2020 increasingly appear to have marked the end of a multi-decade decline, while the subsequent movement has produced a sequence of higher lows and higher highs.

For equity investors, this matters because higher yields raise the return available from relatively safer assets and also increase the discount rate applied to future corporate earnings. Expensive stocks can find it harder to sustain elevated valuations when long term bond yields remain high.

This does not automatically imply a broad equity decline. However, it can make markets increasingly selective. Companies with stronger earnings visibility, reasonable valuations and healthier balance sheets may find greater preference, while businesses dependent on distant future growth can face greater valuation pressure.

Precious metals present a more interesting picture.

Rising yields are normally a challenge for Gold and Silver because higher fixed income returns increase the opportunity cost of holding assets that do not generate regular cash flows. However, the relationship has not remained one-sided.

The relative chart of Gold against the US 10 year yield shows this clearly

The ratio surged during 2020 as Treasury yields collapsed. It then declined sharply as yields rose aggressively through 2021 and 2022. From late 2022 onward, the ratio stabilized and later recovered strongly, showing that Gold was increasingly able to withstand an environment of elevated yields.

More recently, however, that relative trend has turned lower again. This suggests that the latest rise in Treasury yields is beginning to challenge Gold’s relative strength. The important question now is whether Gold can continue to hold its ground if the US 10-year yield sustains a move around, or beyond, the 5 percent level.

Oil needs to be viewed differently. Higher Treasury yields do not directly determine crude prices. Oil remains driven primarily by global demand, supply conditions, geopolitics and production discipline. However, sustained strength in crude can keep inflation pressures elevated. That, in turn, can make it difficult for bond yields to decline meaningfully.

This is where the intermarket message becomes important. Strong oil can reinforce inflation concerns. Persistent inflation can keep yields elevated. Higher yields can then influence equity valuations and precious metals in different ways.

The key message is simple. Investors should not look at equities, Gold, Silver and Oil in isolation. US long-term yields are increasingly becoming an important link between all of them.

For now, the charts are signaling a clear structural change. The era of persistently falling yields appears to be over, and markets are adjusting to a very different interest rate environment.

-Foram Chheda, CMT

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ChartTalk: While the Nifty Consolidates, Leadership Is Quietly Shifting

ChartTalk: While the Nifty Consolidates, Leadership Is Quietly Shifting

by | Feb 26, 2026 | ChartTalk

The headline indices have done little to excite in recent weeks. The Nifty continues to oscillate within a defined range, lacking decisive directional conviction. Momentum has cooled, participation has narrowed in phases, and follow-through has been selective; the wider participation of breadth eludes us.

Yet, there are evident early signs that leadership is quietly rotating. Two sectors in particular, Nifty Pharma and Nifty Healthcare, are approaching structural breakout levels on the weekly timeframe. If confirmed, these moves could mark the beginning of a multi-month leadership phase.  

This is not about chasing defensives. It is about identifying emerging relative strength before it becomes consensus.

The Nifty Pharma Index peaked in the 23,600–23,900 zone in October 2024 and formed a minor double-top in December of the same year. Since then, it has been consolidating within a well-defined Ascending Triangle pattern. During this phase, the index has taken support near its 100-week moving average on two occasions. Ascending Triangles are typically bullish patterns and tend to resolve with an upward breakout.

The index is now approaching the upper boundary of this formation, placing it near a critical resistance level. The steady formation of higher lows indicates gradual absorption of supply at elevated levels. Repeated testing of resistance without significant retracement suggests that selling pressure may be diminishing, increasing the probability of an upside resolution.

Momentum and relative performance metrics further strengthen this constructive outlook. The Relative Strength Index (RSI) has broken above a horizontal resistance level ahead of the price, creating a positive divergence. Meanwhile, the Relative Strength (RS) versus the Nifty 500 Index remains in a structural uptrend that began in 2023 and has broken out following consolidation, indicating sustained relative outperformance.

A similar bullish configuration is visible in the Nifty Healthcare Index. After peaking in the 15,000–15,100 zone between October and December 2024, the index entered a consolidation phase, resulting in the formation of an Ascending Triangle pattern.

The index has recently attempted a breakout, closing marginally above the upper boundary of the triangle. While confirmation requires continued strength, any decisive move higher from current levels would validate the pattern and signal an upside resolution. The compression within the formation suggests that supply at higher levels may be gradually getting absorbed.

Momentum and relative performance indicators reinforce this constructive view. The Relative Strength Index (RSI) has broken out ahead of price, creating a positive divergence and strengthening the bullish case. At the same time, Relative Strength (RS) versus the broader market remains in a structural uptrend and has resumed its advance after a brief consolidation phase, indicating sustained relative resilience.

Takeaway

While the broader market continues to consolidate, the technical structures emerging within the Pharma and Healthcare indices warrant close attention. Both indices are approaching critical breakout levels, supported by bullish price patterns, improving momentum, and sustained relative strength. Should these breakouts confirm with follow-through, they may signal the beginning of a renewed phase of sector leadership.

Foram Chheda, CMT,
Technical Research Analyst

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ChartTalk: A Sector Loses Its Footing as Key Levels Give Way

ChartTalk: A Sector Loses Its Footing as Key Levels Give Way

by | Jan 28, 2026 | ChartTalk

After marking a record high at 26,373 earlier this year, the Nifty has declined by over 5%, reflecting a phase of consolidation rather than outright trend reversal. However, beneath the surface, sectoral participation has weakened meaningfully. Financials, autos, realty, infrastructure, media, and consumer durables have all witnessed corrective declines. This sector looks the weakest amongst other sectoral indices.

While most of these sectors continue to reflect corrective moves within broader uptrends, infrastructure and realty stand out, displaying relatively deeper weakness and persistent underperformance—raising medium-term concerns from a portfolio perspective.

The Relative Strength (RS) chart of Nifty Realty versus the Nifty 500 continues to reflect persistent underperformance, reinforcing the view that capital is rotating away from the sector. Until the RS trend stabilises and shows evidence of basing, any rebounds are likely to remain corrective in nature.

Reviewed on a weekly chart, Nifty Realty Index (CNXREALTY) delivered a strong structural rally between 2023 and 2024, culminating in a peak near 1,157 in June 2024. Since then, the index has transitioned into a corrective phase.

Following the initial decline, the index formed a reaction low near 765 in April last year, from where it staged a rebound of nearly 61.8%, aligning with a key Fibonacci retracement level. However, this rebound lacked follow-through and was subsequently followed by a resumption of the corrective downtrend.

With the recent weakness across broader Indian markets, realty has continued to underperform. Notably, the index breached and closed below the intermediate support zone near 765 on a weekly basis, confirming a breakdown from an important structural level. This development adds to the long-term weakness and opens the door for further downside.
From a technical perspective, the next meaningful support zone is seen in the 630–660 range, implying a potential 10–12% additional decline from current levels. This zone also coincides with prior resistance areas, increasing the probability of demand emerging if reached.

With the Union Budget approaching, near-term volatility and headline sensitivity remain elevated. While a favourable policy surprise could lead to short-term stability or a rebound, the prevailing technical structure of the Nifty Realty Index suggests that weakness is likely to persist unless key levels are reclaimed decisively. In the absence of such confirmation, the index continues to carry downside risk toward the 630–660 zone.

From a tactical perspective, any rebound in prices is likely to remain corrective in nature. As long as the index remains below key resistance levels, rallies may be viewed as opportunities to reduce exposure, with the broader trend favouring a sell-on-rise approach rather than aggressive accumulation.

Foram Chheda, CMT,
Technical Research Analyst

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ChartTalk: A Year of Selective Leadership: Lessons from 2025 and Signals for 2026

ChartTalk: A Year of Selective Leadership: Lessons from 2025 and Signals for 2026

by | Dec 28, 2025 | ChartTalk

As 2025 draws to a close, global equity markets have delivered a year marked by sharp regional divergence, selective leadership, and restrained breadth. While several international indices posted strong relative gains, Indian equities navigated a more volatile and internally fragmented path—highlighting the importance of relative strength, sector rotation, and market structure in portfolio decision-making.

Global Markets: Clear Leaders Emerge

A relative performance comparison of major global indices continues to highlight Asia as the clear leader in 2025, albeit with evolving momentum dynamics. The Korea Stock Exchange KOSPI Index remains the standout outperformer on a year-to-date basis, delivering returns close to ~69%, underpinned by sustained strength in semiconductors, export-oriented manufacturing, and improving earnings visibility. HangSeng and Nikkei 225 also remains in a leadership position, supported by structural reforms, improved corporate governance, and steady foreign participation.

However, Relative Rotation Graph (RRG) analysis indicates a moderation in relative momentum for both KOSPI and Nikkei. While these indices continue to reside firmly within the Leading Quadrant, the recent trajectory suggests a cooling of momentum after an extended phase of outperformance — a typical characteristic of mature leadership rather than an outright trend reversal.

In contrast, developed market indices in Europe and the U.S. are exhibiting improving relative characteristics. The FTSE 100 is gradually rotating toward the Leading Quadrant, signaling an early pickup in relative strength after a prolonged period of underperformance. Meanwhile, the DAX Index, positioned deeper within the Improving quadrant and farther from the center point, reflects strengthening relative momentum alongside improving relative strength, increasing the probability of relative outperformance going forward.

U.S. benchmarks such as the Dow Jones Industrial Average, S&P 500, and NASDAQ remain relatively stable, with rotations suggesting consolidation rather than decisive leadership shifts at this stage. Overall, the RRG setup points toward a potential broadening of global leadership, moving away from concentrated Asian dominance toward a more balanced participation across Europe and select U.S. indices.

Meanwhile, India’s Nifty 50 continues to reside in the Improving quadrant, indicating stabilizing momentum but lagging relative performance versus global peers.

Indian Markets in 2025: Volatility with Progress

The Nifty 50 began 2025 near the 24,000 mark, entering the year amid a corrective phase influenced by global trade tensions and macro uncertainty. This volatility intensified during the early months, culminating in a decisive bottom near 21,743.65. From this level, the index staged a structurally healthy recovery, forming higher tops and higher bottoms, and eventually recording a marginal new lifetime high around 26,325.80.

Despite achieving record levels, the YTD return of approximately 9.60% underscores a year of consolidation rather than broad-based expansion. Technically, Nifty remains well-supported by its rising trendline structure, though it continues to face resistance near upper supply zones.

Bank Nifty: The Domestic Outperformer

In contrast, Bank Nifty outperformed the broader market decisively. Opening the year near 50,841, the index surged to a record high of 60,014.30, delivering returns of nearly 15.50% YTD. This strength was primarily driven by PSU banks, which benefited from improved asset quality, earnings visibility, and favorable credit growth conditions.

However, recent price action suggests consolidation near support levels—an expected pause following a strong directional move.

Sectoral & Broader Market Divergence

Sectoral performance in 2025 highlights selective leadership. Nifty Auto (+20%) and Nifty Metal (+25%) joined financials and PSUs as relative outperformers. On the other hand, Nifty Media (-23%), Nifty IT (-11%), and Nifty Realty (-15%) remained under pressure, while Pharma and Energy ended the year marginally lower.

Perhaps the most notable feature of 2025 was the lack of broader market participation. While the Nifty500 index gained (~+5.5%), Nifty Midcap index (+14%), the Smallcap 100 (-5.70%) and Microcap indices (-11.50%) significantly underperformed—signaling internal divergence and restrained risk appetite.

Outlook for 2026: What to Watch

Heading into 2026, From a technical standpoint:

  • Nifty500 must surpass 24,035
  • Nifty Smallcap must decisively cross 19,716
  • Nifty Microcap must reclaim 26,476
    Such breakouts would signal renewed risk-on sentiment and healthier market breadth.

On the macro front, a favorable US–India trade agreement, combined with ongoing GST reforms and policy stability, could provide incremental support to sentiment.

In summary, 2026 is likely to be defined not by headline index levels alone, but by the depth of participation beneath the surface. the primary trend of India’s frontline indices remains constructive. Sustained higher-top–higher-bottom structures on Nifty and Bank Nifty suggest the broader uptrend is intact. However, for the next leg of the bull market to gain durability, broader participation will be critical.

Foram Chheda, CMT,
Technical Research Analyst

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ChartTalk: A High Quality Continuation Structure Emerging On This Sector

ChartTalk: A High Quality Continuation Structure Emerging On This Sector

by | Nov 29, 2025 | ChartTalk

Macro Backdrop

The broader market environment remains constructive for domestic sectors. India continues to benefit from a stable macro setting, with crude oil trading in a broad equilibrium zone and not imposing material cost pressures on manufacturers. Currency volatility has also remained contained, with USDINR holding within a narrow band for several weeks. This combination provides a supportive foundation for industries linked to discretionary consumption and domestic demand.

Against this backdrop, the auto sector stands out for the consistency of its price structure. The weekly chart of the Nifty Auto Index has formed a clean cup-and-handle formation, a classical pattern that typically appears during sustained primary uptrends. The symmetry and internal alignment of this structure provide a constructive medium-term setup.

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Structure of the Pattern

The “cup” portion of the formation has taken shape over several months. Price action has developed into a rounded base rather than a sharp V-shaped recovery, which improves pattern reliability. The right side of the cup has been supported by steady volume expansion, suggesting institutional accumulation rather than opportunistic short-term participation.

As the index approached its previous peak, a shallow consolidation began forming the “handle.” This pullback has developed within a narrow downward-sloping channel, which is typically observed in healthy continuation patterns. Importantly, volume has contracted through this phase, indicating temporary supply absorption rather than distribution. Classical continuation structures often display this exact volume rhythm.

Momentum & Trend Quality

Momentum conditions reinforce the constructive pattern. The weekly relative strength index has held above the 60 level for several weeks. This behaviour is characteristic of a bullish momentum regime in which declines tend to be corrective and not structurally damaging.

When RSI sustains above this threshold, trend structures generally maintain continuity even when price enters consolidation phases. The current configuration suggests that the handle represents a normal pause within a maturing trend rather than the formation of a reversal.

Sector Breadth

Breadth within the auto space has remained supportive. Several large-capitalisation components have either approached previous swing highs or broken into higher territories. Two-wheelers have displayed stable basing patterns, and select ancillary names have continued forming constructive higher shelves.

When leadership within a sector is broad rather than narrow, the probability of sustaining a structural breakout tends to improve. The current breadth profile indicates that the sector’s strength is not dependent on a few constituents but distributed across multiple industry segments.

Relative Strength Positioning

The sector’s relative strength versus the Nifty has gradually improved. The Auto/Nifty ratio shows a rising profile, signalling emerging leadership characteristics. When mapped on a relative rotation construct, the sector is transitioning through the improving zone and gradually moving toward the leading quadrant. This positioning often reflects increasing relative momentum at a time when the broader market is rotating away from high-beta pockets.

Breakout Conditions & Risk Parameters

A decisive weekly close above the upper boundary of the handle would complete the cup-and-handle formation and open a path toward the classical measured-move projection. Traditionally, the height of the cup becomes the approximate magnitude of the expected advance once the breakout is confirmed.

As with any continuation structure, the lower edge of the handle serves as the critical invalidation level. A sustained break below this zone would weaken the structure and delay the continuation narrative. For now, price remains comfortably within the pattern boundary, and momentum has not signalled deterioration.

Intermarket Considerations

Crude oil, USDINR, and global risk sentiment remain the primary external variables to track. A major breakout in crude or a sudden spike in currency volatility could affect cost dynamics and risk appetite, though neither is currently exerting directional pressure. As long as these intermarket conditions remain steady, domestic cyclical sectors may continue to benefit from a relatively stable macro backdrop.

Outlook

The auto sector currently holds one of the most coherent medium-term technical structures within the Indian market landscape. The alignment of the cup-and-handle formation, constructive volume pattern, strong momentum regime, improving relative strength, and supportive breadth collectively position the sector for potential continuation.

The next few weeks may determine whether this structure completes with a breakout and transitions the sector toward a sustained leadership phase within the broader market.

Foram Chheda, CMT
Technical Research Analyst