Above is the Monthly chart of Nifty FMCG which has been in a big uptrend for the last 10 years, but what next ? Before 2009 i.e from 1999-2009 the whole fmcg sector was range-bound as it can be seen on the charts but will the next 10 years (2020-2029) be the same or this uptrend will continue ??
As we have noticed from past data’s, observations that a up/down cycle of a sector usually lasts for 10 years after which sector rotation happens i.e money flows from one sector to other & the outperforming sector of last 10 years becomes under-performing/ range-bound sector of next 10 years!
For e.g Nifty Psu Banks has been under-performing, range-bound from the past 9 years (From Oct-2010) & Nifty Fmcg has been in great uptrend, outperforming everyone so most likely the next 10 years won’t be the same for both the sectors & the reverse may happen. So in simple words putting your money into fmcg stocks may not suffice good returns for the next 10 years vis a vis Psu Banks which till now has been considered as the safest bet in India due to our population & consumption power!
Technicals – Nifty FMCG has been continuously making Higher Highs, Higher lows in the Monthly chart hence the trend has been bullish throughout the last 10 years. Hence technically we will see a confirmation of top being made if Nifty Fmcg fails to cross the swing high of 33167 on monthly closing & makes a lower low i.e breaks 28100 (Prev. swing low) or the price reaches near prev. swing high with divergence in RSI & MACD which can also be considered as a top being made.