Momentum Mastery Newsletter #6
Market outlook, focus lists , and portfolio updates
Dear Reader ,
Welcome back to the Momentum Mastery newsletter. I hope you are doing well.
Indexes continued their upward momentum this week as well and all of the major indices closed positive for the week making new highs.
Market is clearly in a confirmed uptrend with indices showing strength and increasing participation from broader market. However I am turning a bit cautious now with increasing volatility and most leading stocks in extended territory.
Market Update
Outlook: POSITIVE
Indexes continued their upward momentum this week as well and all of the major indices closed positive for the week.
All of the major indices made new highs for the week , however Nifty 50 and Nifty500 had weak closings as the opened gap down below the open of the previous day and closed lower.
All indexes are comfortably trading above the 21,50 and 200ema and the KMAs are trending higher above each other.
The trend in Net new highs/lows remains positive with new highs outpacing new lows by a big margin. Net new highs/lows have been above 100+ for over two weeks now.
Number of stocks above their 200dma is almost touching 70%.However the number of stocks above the 10, 21 and 50 dma have been steadily decreasing since its peak made in April.
Nasdaq closed below the 10dma following couple of down days on low closing range and S&P500 closed slightly positive for the week on weak closing range.
Market has been on a one way solid uptrend since last three months and the number of stocks and sectors participating has been continuously expanding.
However , recently volatility in the market has increased with increasing number of down days and big range days.
The number of quality setups have also reduced and most setups now are on shorter timeframes.
Leadership has already broken out and most of them are in extended territory. Stocks breaking out now are laggards and making money in the would be difficult.
Market is still in an uptrend with all KMAs trending higher and above each other. However we might enter into a consolidation phase and let the longer term KMAs catch up and try to build a base.
Easy money making phase seems to be over for now atleast. Stock selection will be key.
Also important would be to identify the sectors that are leading after a consolidation as leadership might change and we might see new leaders emerging.
A pullback after a big rally is normal, so watching the nature of consolidation and behaviour of the the leading stocks will be vital to develop any strategy.
With the market slightly extended it is not advisable to be too aggressive in buying breakouts . However if there is a very compelling opportunity one can still try with reduced size.
Staying with the leaders will be key for avoiding whipsaws during the inevitable pullback.
TOP 20-25 STOCKS FOCUS LIST
Please note that these stocks are not recommendations but are some stocks that I am closely watching and holding in my portfolio
Also most of the stocks in the above list have run up a lot in recent weeks and it would be wise to wait for your setups before taking any action.
Portfolio Updates
With the market roaring portfolio is also performing well with 65%+ gains .
RVNL finally moved after 10 weeks consolidation. Further added to position around 125-126.
Leading stocks have been holding logical levels well and well above their stops.
Have not added a new position in last several weeks. However have reduced a couple of them.
Will be looking for relative strength in the portfolio in coming days and also relative weakness in any of the stocks.
Have identified several stocks , however most of them are in extended territory.
Thank you so much for reading the Momentum Mastery newsletter. Take care and see you soon.
Regards,
Zeeshan Syed.
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