“If you ever have to ask for someone else’s opinion on a trade, you shouldn’t be in the trade.”
Linda Bradford Raschke, Commodities Trader, b. 1959
Global Markets
YTD Performance
Correction mode ON ! In all global markets
RSI dipped below 60, next support at 40 it it holds and should be a bounce from there.
Macro Picture
USD-INR
INR getting weaker and nearing All Time Highs is not a good sign for the stock market as its also getting into a medium term momentum.
We can only hope for it to make a double top and reverse from here.
Market Breadth
New Highs / New Lows
New Highs : 285, New Lows : 23, Net : +262
As you clearly see on Weekly basis, the New Highs were in a LH/LL trend since 5.2.2024 and so breadth kept on weakening from there though Nifty was in its own World and kept going up (on low volume).
We need the Net figure to be above +500 to see a trending market where money can be made and hitting SL and breakout squats would stop unlike current scenario.
Nifty 500
The Market
I’m moving from Nifty50 as market index to Nifty500.
The reason is that since it’s not traded, it cannot be manipulated and so it will give the true picture of the market conditions and market breadth.
Check the charts of Nifty50 vs Nifty500…..
Nifty50 doesn’t show like there is a correction happening while Nifty500 you can see correction clearly.
Just thought of sharing so we are not manipulated in our thinking : why our stocks are hitting SL? Is our stock selection wrong or are we in the wrong sector?
There’s nothing wrong, market is in a pullback mode with high volatility so just sitting on the fence for now.
Nifty Indices
YTD Performance
As Budget date comes closer the leading sectors remain unchanged.
My favourites still remain : PSE, Realty and Auto.
IT sector has rotated to the top when we check the 3M outperformance vs CNX500. On 1M basis, IT, FMCG and Pharma are in the Top3 which is a sign that people are getting into defensive sectors to avoid the volatility before the budget.
This probably would be a hedge until 23/7 and we need to see how they behave post Budget till the leading sector once again reveals itself.
Stay away from underperforming sectors, Legendary traders follow this one important strategy of always staying in Alpha sectors and Alpha stocks.
The Alpha
Sectors and Stocks
Keeping a watch on where the leadership is in the sector helps to get the True Market Leader / Model Book Stock / Alpha Stock.
| SECTOR NAME | LEADING STOCK |
| Adani Group | Adaniports |
| Auto | Amaraja |
| Birla Group | Birlamoney |
| Cement | Indiacem |
| Chemicals | Solarinds |
| Commodities | Vedl |
| Consumer Durables | Dixon |
| Defence | Cochinship |
| Electric Equipment | Tril |
| Electronic Mfg | Dixon |
| Energy | KPIGreen |
| EV and Adv Auto | Jwl |
| Fertilizer | Dhanuka |
| Finance | Recltd |
| Fmcg | Trent |
| Hotels | Itdc |
| Infra | Industower |
| IT | OFSS |
| Logistics | Aegislog |
| Mahindra Group | M&M |
| Media | DBCorp |
| Metals | Hindzinc |
| Oil & Gas | Oil |
| Pharma | Wockpharma |
| PSE | Hal |
| PSUBanks | Iob |
| PvtBanks | Icicibank |
| Railway | Rvnl |
| Realty | Purva |
| Reits | Biret |
| Roads | Usk |
| Shipping | Cochinship |
| Solar | Ina |
| Sugar | Bajajhind |
| Tata Group | Asal |
| Telecom | Mtnl |
| Textile | Raymond |
Stocks to focus
Trade / Invest
A frank opinion would be to trade and invest only after the Budget volatility dies down so as not to get caught in the whipsaw.
| TRADE | INVEST |
| Federalbnk | Grse |
| Godrejcp | Kpil |
| Icicigi | Lici |
| Marico | Mazdock |
| Muthootfin | Rvnl |
Your Job is to find ONE stock and handle it well.
Leave a Reply