Market MATH & Watchlist

30-June-2024: Markets at the crossroads.

MATH: Momentum Anticipation and Trend by Homma:

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MATH last week: Click the link

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As technical traders, We

“Anticipate, but confirm. Wish, but only react.”

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Trend:

The short-term trend is Down and threatening to turn bearish (% of stocks above 10DMA sliding below 50%).

Momentum:

Short-term momentum is also decreasing.

Now threatening to slide below 0.

(You cannot trade for meaningful gains when the market momentum is negative)

N50:

At ATH, but had a negative candle on Friday.

Indices inching with underlying breadth declining show bearish divergence.

N500:

Same as N50.

Net4% Movers:

Net4% printed a negative candle on 27th June for the 1st time post the election result day showing weakness. However we closed the week relatively strong.

Anticipation:

I have a neutral stance right now. The falling momentum if continues would mean that the hard money environment is here to stay.

If net4% continue to print positive numbers, we might still rally higher.

On a higher timeframe, there is a negative divergence in the Net52 week High-Low data which is concerning and leads me to have a slightly bearish bias.

Its truly a wait and watch time.

Risk aversive traders should keep one foot at the door.

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Summary:

Strongest (short term and medium term):

This week I will be on the lookout for strength from the following sectors:

• Fertilizers

• Bearings

• PSU banks

• Defence-Shipbuliders

• Railways

• Sugars

• Housing finance

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Watchlists: