During last week's Members-Only Conference Call we discussed a lot of themes, including some potential improvements in the price action of Gold and other metals. However, in this quick post I want to highlight some opportunities that may potentially emerge in the Base Metal space over the next few weeks and months.
This week the Global Industry Classification Standard (GICS) expanded the Telecom Services sector to include Consumer Discretionary and Information Technology components, with it being renamed the Communications Services sector next Friday, September 28th.
In this post I want to highlight the major changes to the sector classifications, chart the new sector (using the back-filled IXCPR Index), and then finish up with some of the components that are the most actionable. State Street, which runs the popular Sector SPDR ETFs, has created a comprehensive document on these changes that I'd encourage you to read in full to understand all the nuances surrounding these changes.
The Island Reversal is a rare but important pattern that has shown up across many of India's Major Indexes this month. As a result, I want to use this post as an educational opportunity to highlight what this pattern is, as well as explain how we're interpreting it in today's market.
A few weeks ago I took a look at the Precious Metals space from the top-down for Premium Members of Allstarcharts, concluding that despite stretched sentiment there's very little evidence that suggests being long this space over the intermediate or long-term. With that said, today I want to discuss the developments in this space since then that have shifted the short-term reward/risk in favor of the bulls.
After a more than 40% year-to-date and 60% 2-year decline, we've been eyeing Tata Motors on the long side for some mean reversion. For the last two months the stock has been range-bound, but the recent breakout has shifted the reward/risk in favor of the bulls over the short-term.
This week's "Chart of The Week" is exploring the potential 20% upside in Tata Motors, however, I want to use this post to explore the rest of the Automobile Sector for potential opportunities.
For most of this year we've been writing about the overwhelming amount of bullish evidence for US Equities, however, as part of our "weight of the evidence" approach we're always questioning our thesis (i.e. here and here).
In today's post I want to share that exercise as I perform it, outlining some current concerns and what the market would potentially look like in an environment where stocks as in the US as an asset class are falling. We're going to stick with our top-down approach and start with International Equities and inter-market relationships, then drill down into specific examples that help illustrate what we're talking about.
The Nifty Financial Services Index accounts for roughly a third of the Nifty 500's weighting. With the next largest components Consumer Goods (13.40%), Energy (12%), and IT (10.90%) ripping to the upside, we know that they'll eventually need to rest, which is why the Nifty Financial Services Index is by far and away the most important chart in India right now.
Two weeks ago I wrote about the Canada's Energy markets, but today I want to do a deep dive into the US Energy Markets. In line with our top-down approach, we'll start with Commodities in general, get into Crude Oil and some inter-market relationships, individual sector ETFs, and finally equities with the best reward/risk scenarios.
August's monthly charts are out for Premium Members, but in this post I want to highlight some of the key changes to, or continuation of, the structural trends that these long-term charts provide perspective on. This 30 minutes per month is some of the most valuable time each month.
Over the last two weeks we've discussed small-caps, mid-caps, and the chartbook updates in depth, though we've not had a post dedicated to large-caps in quite a few months. Many of our upside price targets have been hit in Nifty 50 and Nifty Next 50 names, so I want to use this post to provide perspective on the most actionable long and short ideas today.
Over the last few months we've talked about the diminishing number of short setups as even the weakest sectors and individual names begin to stabilize, however, we're still open to short opportunities. So today I want to discuss what goes into our thought process in distinguishing between stocks that we want to be selling strength in, as opposed to stocks that are stabilizing and not the best candidates to short.
For the purposes of this example we'll talk about two stocks in the Industrial Manufacturing Industry to show that while this is a weak Industry, the individual names to play this theme through are very different.
