From the desk of Steve Strazza @Sstrazza and Ian Culley @Ianculley
I was talking to the team earlier this week and mentioned that I was having a hard time writing. Grant and Ian were quick to remind me that it's probably because "nothing new is happening!"
They were right. Until now...
We finally got a major resolution in what we consider one of the most important charts in the world these days.
I'm talking about the US 10-year yield reclaiming that critical 1.40% level this week. And this begs the question as to what a rising rate environment might mean for investor portfolios.
Well, one thing we know for sure is we want to stay away from bonds... unless we're shorting them.
But how do we want to position ourselves in the stock market if yields are breaking out?
It's simple really. Some stocks do better with rising/higher rates, while others thrive in markets characterized by low growth and low yields. If this is the beginning of a fresh move higher for yields, then we want to be focused on buying the stocks that are likely to benefit the most.
Congratulations to those holding positions in Zee Entertainment, for you, have been rewarded! Well, at least for now.
Zee has been notoriously stubborn for remaining sideways for all of seventeen months now. That's a long time, considering several stocks have grown two-fold, three-fold at the least.
But Zee has also been a part of a sector that has consistently underperformed the market.
But have things changed with the move we saw in Zee over the past two weeks?
From the desk of Steve Strazza @Sstrazza and Grant Hawkridge @granthawkridge
Considering the selling pressure in recent weeks, we were very excited to take a look at our breadth indicators today to see if we finally saw some downside expansion worth pointing out. Spoiler alert: There was nothing there.
Being as we're in a sideways market, we're always on the lookout for a change in character in internals that might suggest some resolutions are finally on the horizon. And since bears have been driving stocks lower since early this month, our focus is on new short-term lows.
With the S&P experiencing some volatility and revisiting its 50-day moving average this week, did we finally get that "fall day?"
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.
If you've invested in this stock, then you know that such a move in ITC is not that common. And more often than not, the follow-through move is generally absent.
From the desk of Steve Strazza @Sstrazza and Ian Culley @Ianculley
Last night we held our September Monthly Conference Call, which Premium Members can access and rewatch here.
In this post, we’ll do our best to summarize it by highlighting five of the most important charts and/or themes we covered, along with commentary on each.
This is one of our favorite bottom-up scans: Follow The Flow. In this note, we simply create a universe of stocks that experienced the most unusual options activity — either bullish or bearish… but NOT both.
We utilize options experts, both internally and through our partnership with The TradeXchange. Then, we dig through the level 2 details and do all the work upfront for our clients. Our goal is to isolate only those options market splashes that represent levered and high-conviction, directional bets.
We also weed out hedging activity and ensure there are no offsetting trades that either neutralize or cap the risk on these unusual options trades. What remains is a list of stocks that large financial institutions are putting big money behind… and they’re doing so for one reason only: because they think the stock is about to move in their direction and make them a pretty penny.
Welcome back to our latest "Under The Hood" column, where we'll cover all the action for the week ended September 17, 2021. This report is published bi-weekly and rotated with our "Minor Leaguers" column.
What we do here is analyze the most popular stocks during the week and find opportunities to either join in and ride these momentum names higher or fade the crowd and bet against them.
We use a variety of sources to generate the list of most popular names. There are so many new data sources available that all we need to do is organize and curate them in a way that shows us exactly what we want: a list of stocks that are seeing an unusual increase in investor interest.
This week we’re looking at a long setup in the Energy sector. Nifty Energy broke out above its overhead resistance. While this stock has been an absolute outperformer, the sector-specific breakout can only add more strength to the existing move.
Nifty 50 has been making new highs, moving past the early 2021 high in May and continuing to rise further. That's well and good. But if these new highs aren't coming through in Banks and Financials, then that's an issue.
Financial stocks make up 37.58% of Nifty 50. So it's safe to say that Nifty50 can't get very far for too long without the cooperation of Bank Nifty and Financial Services.
