Archive for August 17th, 2012

Alpha India - The Auto Stagnation

1) The auto is an outperforming sector. But just because a sector is outperforming does not mean it would top and reverse.

2) There is a need to look at the sector on a stock specific basis.

3) Moreover underperformance does not mean only a net fall; it can also mean stagnation, a sideways action. Out of 16 auto components we have studied here, 12 of them have delivered less than 10% over the last 3 months.

4) Where does our Jiseki stand? Jiseki filtering system along with other price filters confirms this stagnation. Only 3 of the stocks are running a total positive with more than 10% returns. Two stocks Exide and Hero Motors are running a total negative. And rest 11 stocks are non-confirming.

5) This is where we come to another aspect of stagnation. A sideways stagnation which does not push prices net lower can be considered consolidation, which would lead to a continuation of previous trend. Out of the 8 technical charts we have reviewed, 3 stocks are testing key resistances and 5 are testing key multi-year supports.

Jiseki Interpretation. Signals are interpreted as crossovers between various Jiseki Cycles. All three Jiseki cycles (Jiseki 1,2 and 3) depict different time frames. Example: An asset is ranked above 80 percentile and all the three Jiseki cycles are pointing lower, this suggests a running SHORT SIGNAL. Our Jiseki Indices use different kind of exits based on price and Jiseki Cycles. We have color coded the (Jiseki 1>Jiseki 2) SHORT zones with brown sandy (burlywood) and grey (Jiseki 1>Jiseki2) for LONG SIGNALS.

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Coverage India: CNX100, BSE500 traded stocks and Indian Indices.

Domnita Pascut is the founding member of Orpheus Capitals.  Her interest in charts and market patterns was an extension of her keen understanding of social mood and sentiment. How charts could say so much intrigued her. She worked on market patterns, economic research, cyclicality and economic history. It was her liking for history which helped her see the cyclical natures of markets and patterns. Domnita now spearheads the extreme reversion anlaytics developed at Orpheus. She uses Jiseki Performance cycles and combines them with various risk metrics to analyse markets and filter out trading signals.