Sector rotation

trader21

Active Member
#2
Sector rotation is one of the most important concepts in investing.

I will suggest the following two steps (hope you have amibroker):
1. Have a list of all major sectors and their important component stocks.- some other members may help you with that
2. Construct sector indices- I can help with that

This will initially take some time but very easy once you are done. Just using normal EOD databse you can compare long term charts of various sectors. And filter the stocks as per relative strength ranking.
 

1sandeepgupta

Well-Known Member
#3
Dear trader21,
Sir I have the EOD database ready in Amibroker, please tell me how to Construct sector indices and further analysis. Thanks a lot.
regards,
Sandeep.
 

trader21

Active Member
#4
Hi Sandeep, I guess you already have the list of sectors & their components stocks ready. Let me mention something to assure we are on the same page before going further.

The advantages of constructing one's own index, versus using those from NSE/BSE are:

- nse does not has index for all sectors- utilities, tansportation, basic industry, sugar, FMCG...
- For studying seasonality you will need to look at long term chart... they will not give you data as much as 10 years back
- For relative strength ranking of particular stock it will be easier to have you own sector index



Seasonality helps you to understand at what time in a year and at what phase in a business cycle a particular sector will underperform or outperform.

With Relative Strength ranking you can pick the best stocks in the best sector.


So if you aleardy have you stock in your database arranged... we can go ahead constucting own sector index. The method is very simple, you just need a proper afl. There are many afl gurus or I can also help in that.
 

trader21

Active Member
#6
Guys... having the code is always the easiest part.

As I said, first there is a need for proper stocks classification in each sector. Stocks with too little market cap can be dropped out. Please go through nse site to understand how index are constructed: http://nseindia.com/content/indices/ind_faq10.htm#sib1

If someone already has a proper list, they can share here by following these steps.
1. Go to Analysis- automatic analysis
2. In range set n last days, n=1
3. Use this simple two lines for exploration:
Filter = SectorID() > -1;
AddTextColumn( SectorID( 1 ), "Sector name" );
4. Copy all the results of exploration, paste in a XL sheet and share here.
 

1sandeepgupta

Well-Known Member
#10
Hi Sandeep, I guess you already have the list of sectors & their components stocks ready. Let me mention something to assure we are on the same page before going further.

The advantages of constructing one's own index, versus using those from NSE/BSE are:

- nse does not has index for all sectors- utilities, tansportation, basic industry, sugar, FMCG...
- For studying seasonality you will need to look at long term chart... they will not give you data as much as 10 years back
- For relative strength ranking of particular stock it will be easier to have you own sector index



Seasonality helps you to understand at what time in a year and at what phase in a business cycle a particular sector will underperform or outperform.

With Relative Strength ranking you can pick the best stocks in the best sector.


So if you aleardy have you stock in your database arranged... we can go ahead constucting own sector index. The method is very simple, you just need a proper afl. There are many afl gurus or I can also help in that.
Dear sir,
The database setup by me does not conform with the one as dipicted in the figure can you help me to setup one like the one in the figure.
thanks.
 

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