There's a lot going on in the world right now, and India specifically, but one positive to come out of all this mess is we may be seeing a more clear trend develop in USD/INR.
For those new to the exercise, we take a chart of interest and remove the x/y-axes and any other labels that would help identify it. The chart can be any security in any asset class on any timeframe on an absolute or relative basis. Maybe it's a custom index or inverted, who knows!
We do all this to put aside the biases we have associated with this specific security/the market and come to a conclusion based solely on price.
You can guess what it is if you must, but the real value comes from sharing what you would do right now.Buy,Sell, or Do Nothing?
Tuesday's Mystery Chart received a lot of responses, with most of you were erring on the long side.
Now, let's look at the chart and its related theme.
Here's SBI Life Insurance Company Ltd. attempting to break out above its post-IPO base while the more traditional "banking stocks" are being hit hard. Sure the price action is a bit choppy, but it's not going down like many other stocks in the sector and market.
Click on chart to enlarge view.
The reason this chart stood out to us is that the relative strength is obvious and suggests that these stocks will lead to the upside once the market gains its footing. As long as prices are above their recent lows of 732, the bias is to the upside towards 952.
Today we're looking at a chart that highlights a major divergence that's plagued the Indian stock market since January 2018.
We've spoken about this topic in the past, but keep drilling it home every few months because it remains one of the key reasons why Indian Equities as an asset class are struggling.
Selling continues and now many broader market and sector indices are at or below support, so in this post, we'll look at some of those charts and assess the damage that's been done.
For those new to the exercise, we take a chart of interest and remove the x/y-axes and any other labels that would help identify it. The chart can be any security in any asset class on any timeframe on an absolute or relative basis. Maybe it's a custom index or inverted, who knows!
We do all this to put aside the biases we have associated with this specific security/the market and come to a conclusion based solely on price.
You can guess what it is if you must, but the real value comes from sharing what you would do right now.Buy,Sell, or Do Nothing?
Since early July stocks in India have come under more selling pressure, with the Mid-Caps and Small-Cap indices falling roughly 10% and the large-cap Nifty 50 falling about 6%.
This has exacerbated the relative underperformance of India versus other Emerging Markets which it had been outperforming up until late May.
Prices in many of the major indices are now approaching critical levels of support, begging the question will buyers will step in again to defend these levels or is more selling ahead?
While updating this Chartbooks this weekend there were a few stocks that we've spoken about in the past, but I wanted to follow up on given they're near actionable levels.
Several shorts, a few longs, and one to keep on your radar.
