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Portfolio Construction and Technical Analysis: Evidence from IT and Banking Sectors in India
Subject area: Management and Commerce · Area of research: Finance
DOI: https://doi.org/10.64388/IREV9I7-1713727
Abstract
This study examines portfolio construction and technical analysis outcomes in the Indian equity market by comparing the Information Technology (IT) and Banking sectors. Using secondary data obtained from the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE), sectoral portfolios were constructed from eight representative companies?four from IT and four from Banking?over a one-year period from September 2024 to August 2025. Technical indicators such as Relative Strength Index (RSI), Simple Moving Average (SMA), and Rate of Change (ROC) were applied to evaluate price trends and momentum. Portfolio performance was assessed using risk-adjusted measures including Sharpe Ratio, Treynor Ratio, and Jensen?s Alpha. The findings indicate that the Banking sector portfolio generated relatively stable and positive risk-adjusted returns, while the IT sector exhibited higher volatility with comparatively weaker performance. The results highlight the defensive nature of banking stocks and emphasize the importance of sectoral diversification in portfolio management. The study provides practical insights for investors and portfolio managers in optimizing asset allocation strategies within the Indian equity market.
Keywords
Portfolio Construction, Technical Analysis, RSI, Banking Sector, IT Sector
References
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How to cite this paper
@article{1713727,
author = {Perla Jahnavi},
title = {Portfolio Construction and Technical Analysis: Evidence from IT and Banking Sectors in India},
journal = {Iconic Research And Engineering Journals},
year = {2026},
volume = {9},
number = {7},
pages = {1752-1755},
issn = {2456-8880},
url = {https://www.irejournals.com/formatedpaper/1713727.pdf},
abstract = {This study examines portfolio construction and technical analysis outcomes in the Indian equity market by comparing the Information Technology (IT) and Banking sectors. Using secondary data obtained from the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE), sectoral portfolios were constructed from eight representative companies?four from IT and four from Banking?over a one-year period from September 2024 to August 2025. Technical indicators such as Relative Strength Index (RSI), Simple Moving Average (SMA), and Rate of Change (ROC) were applied to evaluate price trends and momentum. Portfolio performance was assessed using risk-adjusted measures including Sharpe Ratio, Treynor Ratio, and Jensen?s Alpha. The findings indicate that the Banking sector portfolio generated relatively stable and positive risk-adjusted returns, while the IT sector exhibited higher volatility with comparatively weaker performance. The results highlight the defensive nature of banking stocks and emphasize the importance of sectoral diversification in portfolio management. The study provides practical insights for investors and portfolio managers in optimizing asset allocation strategies within the Indian equity market.},
keywords = {Portfolio Construction, Technical Analysis, RSI, Banking Sector, IT Sector},
month = {January},
doi = {https://doi.org/10.64388/IREV9I7-1713727}
}