Signs of an EM Storm - Market Internals with Biju Samuel - Quantitative & Alternate Strategy by Elara Capital
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Optimal support
Our weekly compendium
Our Market Internals weekly compendium offers insight into the macro signals, global trends, market perspectives, sector calls and actionable ideas highlighted during the week.
Motherson: Promising set-up
Autos display strong resilience, auguring well for the market trends. Motherson developed scope of strong rallying conditions. The previous bull market in the stock peaked near 141 during early 2018. The stock could now be preparing to take those levels out.
Nifty tests a key trigger level near 21800
Australian equities show progress from a sizeable, big base breakout in what could be a further message to the resource economy green shoots. This breakout projects 12% first, followed by 28% later.
Optimal support
As the market grapples with new negative developments at the geopolitical and economic fronts, Nifty tests the support near 21800 after facing resistance at the three-month channel top near 22800. Continuing with our bullish stance on medium-to-larger trends, the risk-reward ratio for the Nifty would be pegged as 21065 / 23800 through the next four months or so.
L&T – Inflexion point
The level near 3500 has been attractive for a ‘buy the dip’ strategy for L&T. Bullish inflexion is seen to an intermediate oversold and support. Absolute target is near 4250 next, followed by 4700.
Hero Moto – Attractive entry point
Hero Motors highlights an attractive entry point here. The stock has retraced 38% of the prior rally in absolute and relative trends, coinciding with a potential bull market oversold. We term an oversold as ‘bull market oversold’ when we are confident of a strong response to it.
Signs of an EM storm – Update
After a brief shakeout, the EM revival is rekindled. We have already highlighted how the global equity correction ended when the Long-term Breadth Indicator reached the equilibrium zone. The same can be seen here for the Emerging Markets. We believe this to be the preparation for a larger take-off.
TVS Motors – Inflexion point
The low of the bull market correction in TVS Motors is mostly done. An attractive inflexion is underway with important supports and ‘bullish oversold’.
Above views are of the author and not of the website kindly read disclaimer
