Asset, Sector and Stock Selection
by PRASHANT SHAH -
Asset class analysis Let us consider a scenario to understand the role of overall market mood or sentiment. Suppose say you are not in a good mood or feeling low and depressed. If someone were to ask you to participate in a sport or a game, what will be your response? The typical response will ... Read more
Sector analysis
by PRASHANT SHAH -
Selection of Denominator We have discussed that the trend of the denominator is an important aspect of relative strength analysis. For the large-cap stocks, the Nifty 50 index would be a logical choice to be used as the denominator or as the benchmark. Even for derivative traders, the Nifty 50 index would be the logical ... Read more
RS Switch
by PRASHANT SHAH -
If Nifty is outperforming, we should have more allocation in equities. With the breakout in stocks, the sectors and groups outperforming in Nifty are more attractive from an investment perspective. The performance of bullish trades will be better than bearish trades in such a scenario. If other asset classes such as Gold or bonds are ... Read more
Top-down approach
by PRASHANT SHAH -
Top-down approach We can compare the performance of sector averages against the broader market index to assess its relative performance. Below is a chart. Below is Nifty Metal Index to Nifty 50 daily ratio chart plotted with a 200-day moving average. Figure 11.16: Nifty Metal Index to Nifty 50 Daily Ratio chart plotted with 200-day ... Read more
Finding Leaders
by PRASHANT SHAH -
Finding Leaders When a sector is going through a temporary phase of underperformance, the stocks outperforming the sector and having a healthy score during such period can turn out to be outperformers when the sector resumes its outperformance. When the sector is trading above the average line but if the price flips to a column ... Read more
D – Sectors
by PRASHANT SHAH -
We discussed sector performance. Below are important tools that we need to keep in mind regarding sector trends: Using a ranking system based on the above criteria, we have created a tool called D-Sector in TradePoint software. This feature provides an overview of this information on a single screen. If the price trend and relative ... Read more
