Market MATH & Watchlist: 13-Oct-2024
Bias Positive of a bounce. But Confirm
MATH: Momentum Anticipation and Trend by Homma:
MATH last week: Click the link
The most comprehensive article on Breadth and Anticipation:
As technical traders, We
“Anticipate, but confirm. Wish, but only react.”
Trend: “Percentage of stocks above 10-DMA”
Breadth bounced from the oversold region as anticipated.
There is an increase in participation of stocks on the Up.
However, the breadth plot is still below 50%.
An increase in this number above 50% will add to the bullish confirmation and vice versa.
Momentum: “10-day Rate of change”
The momentum plot also paints a similar picture.
It has increased from the lows but is still below 0 and hence yet to prove itself.
N500 (same for N50):
It clipped the 50-SMA and bounced back.
Currently an MA squeeze with 50 as support and 10/21 as resistance.
The last 3 days have been a tight consolidation with a small range + closing very close to each other.
Friday's action was that of a small tail which is positive.
These characteristics help me to have a bias that the squeeze will break out (Kell’s Wedge-PoP).
Net4% Movers:
As anticipated, the plot printed bullish positive numbers on the bounce.
During the 3 days of consolidation, it has gone sideways. But still printing positive numbers.
The plot should be up on the breakout.
Anticipation:
I have a bullish bias.
I anticipate that the squeeze will be broken out that will lead to a sustained rally and another bout of easy money environment.
Other scenarios: We might come back and retest the previous lows, undercutting before the actual move-up.
Or breakdown eventually.
Therefore, have stock-specific stops.
Group Strength:
The strongest groups last week:
Index:
Pharma and Healthcare are back to the top.
Autos, Small & Microcaps, and IT did well too.
Pharma and IT look to start another leg Up.
Sectors:
Financial services did the best, closely followed by Defence.
The Defence sector is now looking to reverse and many stocks are around their reversal pivots.
The same can be said for the Shipping sector:
OTHERS:
A few groups that were strong previously and basing that now are looking for another upleg are:
Transformers (CG Power, Apar, Taril etc)
Wealth Management (Nuvama, NAM-India, etc)
Recycling (AWHCL, Gravita, POCL etc)
Water Management (Wabag, Shakti, EMS etc)
Sugars and Alcohols.
Speciality Chemicals are proving themselves every day (Fluorochem, Neogen, Atul etc)
QSR, similar to Spec Chem watch out for new strength (Stage 2)
Watchlists:
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