Invest Without Emotions
A down week for our portfolio, the portfolio crashed by 4.7%.
As the NIFTY dipped by 2.33% over the week, our momentum portfolio was down 4.7% underperforming NIFTY by over 2 percent. However, we continue the process of following a systematic repeatable process, with appropriate risk management steps and hope for a better performance in the coming week.
Talk to us about our Quantitative Portfolio Strategy Execution.
The NIFTY ended on a bearish note, melting down -2.19% for the week.
Biggest losers were JPASSOCIAT (-12.35%), BANKBARODA (-11.49%) and CIPLA (-8.14%).
And the biggest winners were TCS (+5.53%), HDFC (+3.97%) and SUNPHARMA (+3.64%).
Decliners eclipsed advancers 38 vs 12
Gold: +0.38%, Banks: -2.77%. Infrastructure: -6.02%,
Net FII flows for the week: $1,843.29 mm
(Equity) and $112.15 mm (Debt)
Today’s pick is RCOM [stockquote]RCOM[/stockquote]. The stock started saw a rush to Rs. 110 levels in the starting of the year, but could not sustain the level, and started its downtrend to reach Rs. 50 by September. Since then the stock has been in an uptrend. In the last three months, the stock has moved +27% vs. +4% of the Nifty’s.
Oscillator RSI and CMO are closing in towards the over-sold territory. The stock is trading close to the lower end of Bollinger band giving an upward bias. Short-term technical just saw 18×9 bearish cross-over.
The MACD line and the signal line are moving parallel to each other and suggest the short –term downtrend to continue. Also, Long-term GMMA lines are starting to converge given the range-bound movement of the stock.
RCOM’s average correlation with the Nifty is 0.62 which is positive and strong. The scrip will be replicating movement of Nifty closely. [stockquote]NIFTYBEES[/stockquote]
RCOM has a historical volatility in the range of 0.4 to 1.0. The scrip’s volatility is currently in the middle of the range.
Given these technicals and divergences we suggest a short-term sell. For the long-term, we could take a call given the stocks ability to stick to the trend-line in place. However trailing stop-losses will be of help in case sudden trend-reversal were to take place.
Read what experts have to say about the Indian telecom sector here.
When markets don’t help you, you need to help yourself. In the last three days, the technical trades were not able to do a very good job. And I also learned that having 3 stocks in portfolio, still is concentrated. Hence I tapped on the opportunity created today in the markets, to expand the portfolio into a couple of more stocks with bullish technicals.
I cut back my holdings on UCOBANK [stockquote]UCOBANK[/stockquote]to half, and CAIRN [stockquote]CAIRN[/stockquote] to three quarters to take new positions in SAIL [stockquote]SAIL[/stockquote] and PETRONET[stockquote]PETRONET[/stockquote]. Here is why..
It is clearly visible for SAIL that the oscillators are nearing the over-sold levels, and hence an opportunity is being created for the stock to start its up-move. The stagnating MACD lines are in confirmation as well.
Again, for PETRONET, the oscillators are much below their historical reversal levels, suggesting of an up move possibility.
Although, partial closing of positions did take the po
rtfolio a bit down, but I am sure that in the longer turn of events putting eggs in different baskets is going to help.
Here’s how the performance and portfolio looks like currently.
Cheers!!
Today’s next pick is IDEA [stockquote]IDEA[/stockquote]. The stock saw a range bound movement till April. After a downward break out of the range, the stock moved to Rs. 75 levels to find support till September. Since then the stock is in an uptrend, and it saw a 52 week high of Rs. 123 in mid-January. In the last three months, the stock has moved +20% vs. +4% of the Nifty’s.
Oscillator RSI and CMO are in no-man’s land. The stock is trading close to the lower end of Bollinger band giving an upward bias.
The MACD line and the signal line are moving parallel to each other and suggest the short –term downtrend to continue. Although, Long-term GMMA lines are well spread out, and hence are giving a bullish sign for the long-term.
IDEA’s average correlation with the Nifty is 0.41 which is positive. The scrip will be replicating movement of Nifty. [stockquote]NIFTYBEES[/stockquote]
IDEA has a historical volatility in the range of 0.4 to 0.8. The scrip’s volatility is currently in the middle of the range.
Given these technicals, we suggest a short-term sell. For the long-term, we suggest a buy. However trailing stop-losses will be of help in case sudden trend-reversal were to take place.
Read what experts have to say about the Indian telecom sector here.
