Market MATH & Watchlist
8-Sep-2024: Developing a bearish bias
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”
After a slowdown the entire week and resisting the fall, the plot breaks down the 50 level.
The recent languish move to new highs also had a bearish divergence with breadth.
This creates a bearish bias.
Momentum: “10-day Rate of change”
The momentum has constantly been decreasing last week, unsurprisingly we had a hard money environment.
It threatens to pierce the 0 mark.
As the momentum plot is slightly lagging in nature (needs more observation), I believe we will go below 0.
Bias bearish.
N500 (same for N50):
Clipped the 2 previous swing lows in the shorter timeframe.
Closing was extremely weak.
The absence of a lower wick leaves no room for anticipation of an immediate pullback.
hence Bias is bearish.
Net4% Movers:
It pierces below 0.
the intraday plot doesn’t show any bouncing behavior.
As such, bias is bearish.
Anticipation:
I have a mildly bearish bias.
If that comes, one can expect the 50-DMA to support it.
My bias towards a long-term top would strengthen if that doesn't hold.
Group Strength:
The strongest groups last week:
Index:
Consumer Durables-FMCG-Consumption
Pharma and IT are still holding up.
Strong Groups last week:
Pharma
Watch out for Strength:
Recycling
If you are still trading, follow the strongest RS stocks.
Watchlists:
Keep reading with a 7-day free trial
Subscribe to The Technical Take to keep reading this post and get 7 days of free access to the full post archives.