Market MATH & Watchlist

11-Aug-2024: Pinched and Tight. Bullish Bias

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:

Negative but Improving.

Direction is Up and has crossed above its 5DMA.

Bullish Bias

In addition, the medium-term breadth also looks to have found a significant bottom.

% stocks above 50DMA hit the 50 level and has bounced. It is now above its 5DMA and pointing upwards.

This is positive in the short term.

Momentum:

Negative and sideways.

Momentum plots are generally lagging in nature.

It is still only marginally negative and with the trend leaning upwards, I have a bias that momentum will be in the positive zone soon.

N500 (same for N50):

Volatility contraction is clear to see.

We haven’t fallen below Monday's lows.

Price is getting pinched between the short and medium-term MAs.

Both breakout and breakdown possibilities are open.

But I have a bullish bias.

Net4% Movers:

Buying pressure has prevailed over selling pressure at the end of the week after the initial selling on Monday.

This is again positive.

Anticipation:

My bias is towards the bullish side.

As long as the indices remain inside the pinch, I will continue to hold a bullish bias.

The bias will change to bearish if we break down below the lows of last Monday.

It will be interesting to see how the market reacts to the Hindenburg issue.

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Summary:

Strongest (short term and medium term):

Pharma and health continue their strength.

The media and FMCG index was also strong.

Apart from these,

Stock market-related financial services, Solar Manufacturers, plywood, Packaged meat- Aquaculture, packaging films, and agrochemicals were strong pockets.

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

• Pharma-healthcare

  Telecom

  Textiles

  Power-Oil&Gas-Energy (look for a pullback)

  Water theme

  Recycling

  Aquaculture

PS: look for a pullback in the IT index as well

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Watchlists: