Market MATH & Watchlist: 20-Oct-2024

2nd Bottom of a Double Bottom?

Sakatas Homma

Oct 20, 2024

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MATH: Momentum Anticipation and Trend by Homma:

MATH last week: Click the link

The most comprehensive article on Breadth and Anticipation:

The Pivot

The 3 bulls framework for situational awareness

"Your first problem is to find a setup. Your second problem is to understand when that setup does and doesn’t work." ~ Pradeep Bonde…

5 months ago · 21 likes · 2 comments · Nitin R

As technical traders, We

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

Trend: “Percentage of stocks above 10-DMA”

We are below the bullish level of 50 and below its 5-DMA.

So “No Trade” zone.

But, we have a bullish divergence with the index.

Price is at the previous low, while the breadth looks to be higher.

Momentum: “10-day Rate of change”

The momentum plot is barely bullish.

N500 (same for N50):

After the bounce from an oversold level on 8th October 2024, the indices formed a tight area and eventually broke down to test the previous lows.

It currently shows a supporting action at that level.

This could be the second bottom of a potential double bottom base.

In which case, we need to see the follow through soon from this level.

Alternatively, a breakdown of this level will spell more bearishness for the markets.

Net4% Movers:

The Net 4% plot after moving sideways clipped the 0 level and bounced back to the positive territory.

Similar bullish divergence can be seen.

Having said that, the strength in the uptrust is missing.

A value of ~> 10% is strong.

Anticipation:

markets are delicately balanced right now.

Any slight strength or weakness can push the prices to either direction.

The fact that markets are showing some bullish divergence, has found good support at previous support level and a lot of stocks have showed shakeout action gives us a bullish bias.

Conversely, FII pulling money out, and lack of buying force also warrants us to be vigilant about more bearishness.

Wait and watch.

Awiaiting more confirmation via price.

I remain at the fence, with a tinge of bullish bias.

Group Strength:

The strongest groups last week:

Index:

Banks and financials did well this week.

Pharma and IT looking good (did not correct with the market).

Realty so showed good recovery.

OTHERS:

Transformers, Wealth Management, Recycling, Water Management did well.

Sugars and Alcohols & Speciality Chemicals looks poised too.

Watchlists:

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