Market MATH & Watchlist: 18-Jan-2024
Bias: Of a lower high around the Key MAs
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-DMA”
Medium-term: “Percentage of stocks above 50-DMA”
Long-term: “Percentage of stocks above 200-DMA”
Breadth improves in all timeframes but is still far from the bullish regime (50% mark).
Momentum:
The Mswing score and Landry Score.
There is no improvement in momentum yet.
Landry:
N50:
Finds a semblance of support at the previous low and the AVWAP from October 2023 lows.
Below all key MAs with the overall bearish structure still intact.
N500:
Very similar to N50.
Bearish and below all key MAs.
Net4% Movers:
The Net4% plot recovered well after going oversold on the 13th.
But the buying pressure is weak and the consistency is missing.
Anticipation:
As anticipated last week, we had an oversold bounce this week. Markets bounced meekly for three days and closed the week with a sideways day today.
We have a minor pivot high already (yesterday’s high is a pivot high as we have a lower high today) which opens up multiple possibilities.
One way it can shape up is as a retest of last week's breakdown level (from the H&S-like base), get slapped by the down-trending key MAs, and resume the downtrend.
The other possibility is for it to continue this counter-trend move to the higher MAs (20 and/or 50), still form a lower high. This should be a tradable rally for short-term traders in my opinion.
The overall structure is still bearish. The trend is bearish and momentum is nowhere to be seen for now.
There my bias remains bearish in the medium term and bearish to neutral in the immediate term.
PS: Anticipations are often wrong and bias should be adjusted with every candle.
Group Strength:
The strongest groups:
Index: NA
Groups:
A bottoms-up approach, looking at the High RS names shows the following sectors which could turn strong:
Trend Reversal in the Insurance sector with good earnings.
EMS sector names are at Trendline supports.
Bottoming action in Paints.
Tata Motors bottoming action.
uncanny strength in some OEMs.
Railways, Defence, and other PSUs forming reversal bases.
Small Banks (eg South Bank) reversals.
PS: Before the week starts, look for a scanning session video on my YouTube channel discussing the above.
Watchlists:
Follow the Strongest Stock (the RS 100 names):
Watchlist(s) below
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