Market MATH & Watchlist: 8-Feb-2025

Bias: Neutral to Bullish

MATH: Momentum Anticipation and Trend by Homma:

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MATH last week: Click the link

The most comprehensive article on Breadth and Anticipation:

The 3 bulls framework for situational awareness

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As technical traders, We

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

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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”

The short-term trend is now above the bullish level for a week.

While the medium and Long-term trend is still bearish and trending down.

Momentum:

The Mswing score and Landry Score.

Homma Mswing Score: It has continued to trend up this week.

Landry Daily: (Momentum Bias for Swing Play)

While the Landry plot also trended up the entire week, it printed a lower value on the week’s close. This could mean the start of a downswing in momentum.

Landry Weekly (Momentum Bias for Positional Play):

Still trending down.

For an easy-money environment to sustain for positional trading, this plot needs to start trending upward.

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INDICES:

N50:

The countertrend bounce found the DTL line and the 50-DMA resistance. Price is currently pulled back to the 10/20 MA which could act as a potential support.

N500:

Weaker than the N50, the countertrend bounce found resistance at the previous high. Still on a downtrend, but looks like a base under construction.

Net4% Movers:

Mixed week. No clear strength and no clear weakness.

Anticipation:

This counter-trend bounce which started as an oversold rally on 29th Jan is still On.

It has been punctuated by minor pullbacks and currently, the MidSmall400 sits on the 10-DMA with the 20DMA on top.

Friday although was a bearish day, the bulls pegged it back at the later part of the day. So this is a good sign.

My bias changed from “Neutral to bearish” to “Neutral to bullish” once we crossed the 10-DMA. It will remain as long as it maintains that structure.

The overall structure is still that of a Lower-high Lower-low.

Positionally therefore is a NO Money whatsoever.

For swing trading, this is a hard money environment, as we are on a countertrend bounce, but this can reverse in a heartbeat.

Below the 10-DMA, we go back to a No Money for swing trading again.

And if that happens we wait for a bottom to play the bounce again.

If this bottom is found at the previous low, a slight undercut or higher; that would be a good sign for this level to be a medium-term bottom.

So, we wait and play accordingly.

I anticipate a continuation of the counter-trend bounce upwards with extreme chop and volatility. Maybe challenge the 50-DMA.

PS: Anticipations are often wrong and bias should be adjusted with 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.

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Group Strength:

The strongest groups:

Index: Pharma-Health-IT-Pvt Banks looking good.

Groups:

It is difficult to put a pin on a specific group while the market is bearish. Best to take a bottoms-up approach by looking at individual stocks from the relative strength list.

PS: keep a tab on “Big Base Breakouts”. Those who break out for these will likely be the leaders when the Markets reverse. Eg: SRF, Kotak Bank, Jindrill, etc

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Watchlists:

Follow the Strongest Stock (the RS 100 names):

Intraday tradable names would be found on the Strong Start candidates every day:

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Watchlist(s) below