Signals act as indicators for what's to come or what we can expect. If you look closely, there are several signals that can be picked up from the market in order to stay ahead of the curve. A lot of analysis goes into arriving at the bottom of the funnel that is stock selection.
While the bigger trends are in place and their relative analysis helps us understand their strength and weaknesses, there are certain signals that can be picked up on a regular trading day as well.
This week we're looking at a long setup in the Metal sector. Several stocks in this sector are performing well with our Outperformers scan throwing up another popular name last week.
Early in February, we had published a post discussing the Adani Group and its targets as well as risk management levels.
Seeing as this particular solar system is completing rotations and revolutions rather quickly, we thought it would be a good idea to revisit these stocks and track the updated levels for the weeks and months ahead.
Our equally weighted custom Adani Group Index has shown no sign of slowing down. The bullish trend is strongly in place and seems well on its way to the next higher level.
Click on chart to enlarge view.
Now let’s take a look at individual stocks and where they stand at present.
The weekend is when we open all our chartbooks and go through every chart in order to update or follow trends and sentiments as they build over the week. But sometimes, a few names pop up even before we hit the weekend research start button.
Today we will discuss two such names that seem to be displaying resilience in the market over the past couple of weeks.
From the desk of Steven Strazza @Sstrazza and Ian Culley @Ianculley
I think we can all agree that the market is an absolute hot mess right now.
The Precious Metals complex is as good an example of this as any right now.
In this post, we’ll use this shiny group of commodities as a case study to illustrate the mixed signals we see not just here but in asset classes all over the globe these days.
It’s a major development, to say the least - so we’d be irresponsible not to monitor it closely as the way things resolve from here will likely have implications that span across markets, far and wide.
We published a post talking about how Chemicals were outperforming in the current market scenario. Another such group of stocks that have been performing well, is Cements. We published a post dedicated to Cement in December 2020, but it seems like the move has only started! More names are getting added to the 'strong' column so we thought we could revisit this sector again.
Are there any other stocks that have undergone any structural changes? Let's find out.
ACC has been an underperformer in this sector for quite some time now where we've cautiously put this name on the 'watch list'. It seems like the wait might just be over!
The price has finally broken out above the all-time high near 1,870 and looks ready for another leg of the rally. This is a four-year base breakout as the indicator continues to hovers around bullish momentum territory.
We are bullish above the risk management level of 1,870 with a target near 2,470.
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.
At the beginning of each week, we publish performance tables for a variety of different asset classes and categories along with commentary on each.
Looking at the past helps put the future into context. In this post, we review the absolute and relative trends at play and preview some of the things we’re watching to profit in the weeks and months ahead.
While the same themes we've laid out in previous reports continue to hold strong, we have seen some recent deterioration, particularly in the large-cap sectors and indexes.
Despite an increase in bearish developments, the overall weight of the evidence is still firmly in the bull camp, and we remain aggressive buyers of stocks and risk assets, particularly over any longer-term timeframe.
The market has been moving sideways for two months now. But that does not mean that every sector will reflect the same move.
As the story of a market cycle unfolds, various sectors assume importance just like different characters in a play. Currently, the Chemicals segment is in the spotlight so let's see what its constituents are up to!
The Chemicals segment has been showing strength over the past few days with some interesting setups lined up. We included one such setup in our Trade of the Weekpost.
First up, we have Pidilite Industries which is now moving back into positive territory as it inches towards its overhead resistance at 1,800. The price has consolidated in the range of 1700-1820 and looks ready for a breakout as the indicator attempts to move higher. With the overall sector in focus, Pidilite could be dolling up to participate in the next leg of the rally.
We are bullish above the risk management level of 1,820 with a target near 2,030.
In our continued effort to identify individual equities that fit within our larger Macro thesis, we recently rolled out our latest bottoms-up scan: "The Minor Leaguers."
We write a post every other week where we outline some of our favorite setups from this universe of stocks.
We've already had some great trades come out of this column and couldn't be happier about the early feedback.
Moving forward, we'll be rotating this column with "Under The Hood" each week.
In order to make it onto our Minor League list, you must have a market cap between $1 and $2B. There are also price and liquidity filters.
Then, we simply sort the stocks by their percentage from new highs. Easy done.
Something we’ve been working on internally this year is using various bottoms-up tools and scans to complement our top-down approach. One way we’re doing this is by identifying stocks as they climb the market-cap ladder from small, to mid, to large, and ultimately to mega-cap status (over $200B).
Once they graduate from small-cap to mid-cap status (over $2B) they come on our radar. Likewise, when they surpass the roughly $30B mark, they roll off our list.
But the scan doesn’t just end there. We only want to look at the strongest growth industries in the market as that is typically where these potential 50-baggers come from.
