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.
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.
Over the past few days, the narration around Bonds has really caught on. With bond yields across the globe recovering sharply from lows, there are a lot of questions about the current stock market rally, the impact of bonds on the bull-run, whether we should prepare for a sell-off etc.
Let's try and address some concerns through this post where we talk about the impact of bonds and the US dollar on the ongoing stock market rally.
Let's assume we know nothing about the correlations in the market and are basing our view on the simple activity of observing the historical price action and its subsequent impact.
Here we have India's 10-year Government Bond. When we look at the extremes of the movement, which comprises of the high and low clocked in the 2008 crash, the range lies between 9.30-5.25. Since then for 12 years, the range hasn't been breached and if this was any other chart with the name stricken out, one would say it's going sideways.
In the chart below, we have highlighted three instances where the bond yield has bottomed out and rallied. This has happened in 2009 and 2017 in the past. Can we expect the same in 2021?
Here we go with our next round of the Top-Down Take post. At All Star Charts, we like to keep things simple and look at the bigger picture. We let the charts speak to us and then decide what to do. Always remember, the Trend is our Friend.
Today we’re taking a look at a sector that has been an outperformer in the recent past despite broader market correction. Nifty Metal is now moving from strength to strength as more constituents break out of long-term bases.
We've been talking about Commodities and a possible upcoming supercycle in this asset class.
The reason we're inclined to this view is that we're seeing signs of this on several different charts across the globe. Now when that happens, we've got to sit up and notice.
Remember when the unthinkable happened and Crude Oil traded below zero? Entertaining as it may be (to some) such extreme readings on the chart tend to act as signals for the future.
Take a look at the chart below. It is the S&P500 relative to the inverted ratio of the CRB Index (Cap-Weighted Commodity Index). The long-term chart below suggests that the extreme negative readings that we saw in Crude Oil seem to have probably sealed the top in this ratio. Can Commodities begin their outperformance going forward? It's quite likely. The individual constituents certainly look like they're ready for a good move!
Introspection is a great quality to have. While a lot of introspection goes into life in general, many market participants fail to identify their errors because they do not review their actions in the market. The one thing that needs to be clear is that no new money is being created in the market. The money is simply shifting hands.
This week we're looking at two long setups from the Energy space. Nifty Energy has performed well and its time to start observing its constituents more intently.
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.
Big day everyone! We are debuting a new feature for Premium Members of All Star Charts India! There are a lot of exciting things lined up, but it's time to reveal a little something now.
Introducing the new kid on the block- The Outperformers!
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 market as a whole does not move together. Regardless of the market direction, there are always certain stocks and sectors that act as leaders and laggards. As the name suggests, the Leaders are the first to respond to a particular trend, whereas the Laggards join in later.
There is a big advantage in identifying these leaders in any given market environment. These are the names that generate greater returns compared to market indices as well as other stocks.
For example, in a market environment where mid-caps are outperforming the large-caps, it would make sense to be invested in mid-caps rather than large-caps.
You'd have to be a part of the market for quite some time to be able to claim that you witnessed a bull run in the PSU Banks sector. This sector is notorious for perpetual underperformance regardless of the market sentiment.
Well, maybe that's changing. Over the past two weeks, these hibernating stocks decided to wake up and join the party. Looks like they finally received the invite for the ongoing rally!
A move above 1,900 in the PSU Banks Index is crucial and here's why. This level has played the role of strong support for close to seven years. With the breach of this level in early 2020, the principle of polarity would mean that 1,900 would turn into stubborn resistance. The fact that PSU Banks has broken out of this resistance rather quickly, hints at the strength that's building in this index.
We are bullish above 1,900, for targets near 2,645 & 3,445.
