Market MATH & Watchlist: 17-May-2025
Easy Money| Bias: Consolidation-Pullback and Continuation of the Uptrend
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:
Short-term: “Percentage of stocks above 10/20-DMA”
Medium-term: “Percentage of stocks above 50-DMA”
Long-term: “Percentage of stocks above 200-DMA”
In the short term, we are in an overbought zone.
In the medium term, we are also in the overbought zone.
In the long term, we have broken out of the oversold zone.
Momentum:
Homma Mswing Score: (basal Momentum)
Mswing score still bullish (above 50%) and approaching the overbought zone.
Landry Daily: (Momentum Bias for Swing Play)
Strong momentum (Momentum for swing trading) is breaking out.
Swing trading is going into an Easy money environment now.
Landry Weekly (Momentum Bias for Positional Play):
Landry momentum weekly also has a breakout candle this week.
Positional traders can start building positions now.
If we have a 2-3 week of increase in Landry weekly, we will have Easy money environment for Positional trading too.
Currently, Hard Money, as we dont know if the momentum will follow through or not.
Net4% Movers:
After the outrageous show of hands on 12th with a Net4% print of 61%.
The plot has been sideways well above the 0 zone.
This is a good signal of intent from the Bulls.
N50:
Slight decrease in the outperformance of Nifty (Mswing plot red) this week after bouncing right from the 21ema.
Still trending up and reaching an important resistance level.
Anticipate it to consolidate before challenging that level.
The other likely possibility is to breakout and face resistance from the ATH.
Anticipation:
So, after bouncing off the 50-DMA with a bang, we are now on the 5th day of the Upswing. This is no longer a counter-bounce, as we now firmly have a set of HH-HLs on the base.
How could things unfold next?
The uncertainty comes from this:
The market has broken out of a major pivot and a big reversal base (complex iH&S).
This marks a shift to a nascent uptrend on a higher timeframe.
But, it is also getting closer to a strong resistance zone.
But on the other hand, the market breadth is getting stronger by the day.
You get me?
So, what to do?
Although we are in the overbought territory, in the short and medium term. That in itself is not a reason for concern. As in bullish conditions, short-term breadth remains in the overbought territory for longer periods, and the upswing cycle is generally longer (8-15 days) than the upswing in a countertrend bounce (3-5 days).
Therefore, we will trust the bounce as long as it continues.
Initial signs of the pullback can come from intraday breadth and/or when the short-term trend crosses below their 5-DMAs or 10 crosses below 20.
The bias is that the pullback will come. (coz death, taxes, and Pullbacks are inevitable)
But bias is of continuation of the Uptrend. Expect one of the key MAs to support it.
If 10 supports, the start of the Uptrend is very strong.
If 20 support, mildly strong.
If 50 is required, we may trend up, but with a bigger base building first.
Positional bias just turned to Hard money this week.
PS: Anticipations are often wrong, and biases should be adjusted after every candle.
If you dont know this already, I update my Market MATH every day on my website under the BREADTH section. Please check in every day post-market.
Group Strength:
Sectoral:
Pan-market move this week, but
Defence moved double the market rate.
Financials are still strong.
Fresh reversal base breakout in Railways.
Index:
Pan Market move is visible here, too.
Smallcaps, Realty, and Metals had a big week.
Large-cap outperformance could be coming to an end.
Watchlists:
Follow the Strongest Stocks (the RS 100 and RS 100 Liquid watchlists below):
Find Tightness candidates from Tandem Inside bars and Tandem Low ranges.
https://www.sakatashomma.com/scanners
PS: It has been a hard scanning session this week. Being the 5th day of the Upswing, most names are extended. The corollary being, always position yourself on day 1, 2, or at best 3, or the Upswing. Low-risk set-ups on EPs will most likely continue to pop Up.
Find my Pullback and Tightness candidates from the Highest RS names below.
Here is how last week’s list performed:
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