This week we're looking at one long setup in Cement. Commodities and Infrastructure are bouncing from crucial levels. We'd like to look at a name from this segment.
We retired our "Five Bull Market Barometers" in mid-July to make room for a new weekly post that's focused on the three most important charts for the week ahead.
This is that post, so let's jump into this week's edition.
As Technical Analysts, our primary goal is to identify the trend. If it's headed higher, it's positive. If it's headed lower, it's negative, and if it's stuck in between, it's sideways.
Sounds simple? Well, sort of.
As traders, your primary goal is to make money. Yes, we're all here to learn, but isn't the goal also making money?
Follow the trend, trade/invest accordingly, and book profits.
Sounds simple? Well, not so much.
Risk Management is probably the most important and the most undermined concept in the market. A great plan can turn into a disaster with bad execution. An average plan can turn into a success with good execution. It's the execution of the plan. That's where the magic happens.
We're back to share with you, what we love to do and that is the Top/Down approach. At All Star Charts we're big fans of the weight of the evidence. The market tells us where it's going, and we listen. It's pretty simple really.
Over the past couple of weeks, we've noticed the PSU banks bouncing off their support and actually displaying some strength.
So today, let's take a look at what this particular sector is hinting at.
The Outperformers is our newest scan that pinpoints the very best stocks in the market. It’s the fastest, easiest way to find quality names that are primed for major moves.
The goal is that as the market rally progresses, the sector rotation within the market will reflect in this scan. So while our Top/Down Analysis helps us with the broader view of the market, this Bottom/Up scan makes sure that we catch the slightest change in sentiment.
The process of our analysis is such that we look at a variety of charts in order to arrive at a view at any given point in time. To make sure we're identifying new trends that are developing in the market, we have several breadth indicators that we track.
As we already know, the market has been in a bit of a mess off-late. Within this market move, different sectors have taken leadership- almost as if playing a game of musical chairs.
Over the weekend when I was going through the usual suspects (charts) I noticed a slight change in market activity. So here I am talking about it!
This week we're looking at two long setups this week. One in the Chemicals space and the second one in the Auto sector. While Chemicals have been among the gainers over the past few weeks, the Auto seems to be catching a bid off late.
We retired our "Five Bull Market Barometers" in mid-July to make room for a new weekly post that's focused on the three most important charts for the week ahead.
This is that post, so let's jump into this week's edition.
The market has been messy for a while and we've been reiterating that point for some time now. There are no new signals in terms of a direction, but we thought this is a good time to look at our risk metrics.
When we go through the metrics, we are essentially trying to put them in three buckets. Positive, Negative, and Neutral. Going by the weight of the evidence, we decide which way to go. Leave it all to the charts, they're your map for this treasure hunt.
There are several different metrics that we track on a global and a local level. The goal is to identify whether we are risk-on, risk-off, or waiting. This translates to how liquid one's portfolio could be at a given point.
Index view:
First up, let's take a look at what Nifty 50 is up to. We can see that since February this year, the market has been consolidating. This move has been limited between 15,470 and 14,250. What we also noticed early on was the divergence in the indicator. Momentum was losing steam despite price making new highs. That acts as an early signal of a possible change in momentum. Keep in mind, it is not the sole signal to track.
We debuted a new scan recently which goes by the name- All Star Momentum.
All Star Momentum is a brand new scan that pinpoints the very best stocks in the market. This time around, we have incorporated our stock universe of Nifty 500 as the base. Among the 500 stocks that we follow, this scan will pump out names that are most likely to generate great returns.
While we go through our lists of sectors and stocks on a weekly basis, we thought of launching a product that would highlight the names that are the strongest performers in our universe and those that are primed for an explosive move.
Just like The Outperformers scan, this is a list of stocks belonging to the sectors that display relative strength in the market at any given point in time. Since sector rotation is the lifeblood of a bull market, we will be ahead of the curve before the gears keep shifting.
