A hard-money environment where setups are tough to find and structural breakouts are absent.
Conservative swing portfolios should remain in cash, & start deploying pilot positions only if the watchlist shows some strength.
⦿ Bias: Bear
⦿ Trend: Downtrend
⦿ Swing: Upswing
⦿ Momentum: Negative but improving
Bias → Bear
From a long-term perspective, we remain in a bear market.
Over the past month, more than 50% of stocks have remained below their 200-day simple moving average (SMA). Hence, we stay in a bear market.
Only about 28% of stocks are positioned above their 200-day simple moving average. This week's numbers are marginally better than last week's, and we remain well below the 50% mark.
When more than 50% of stocks go above their 200-day SMA, we will again enter a transitional market. If this percentage stays above 50 for a month, we will finally enter a bull market.
Trend → Downtrend
The market remains in a downtrend.
The 52-week Net New Highs have remained consistently negative for the past three days.
Over the past three days, most major indices have consistently remained below their 50-day moving averages. About 32% of all stocks have remained above their 50-day moving averages, but, favoring the bulls, the 50% breadth is above the 200% breadth.
The market will enter a confirmed uptrend only if the 52-week highs consistently stay above the 52-week lows, PLUS more than 50% of stocks remain above their 50-day moving averages.
Swing → Upswing
The market is in an upswing.
The MBI started this week in the red, but bounced with huge strength on Tuesday (3 Feb), with the 4.5R numbers in 4 digits, after a trade deal between India and the US was announced (as usual on social media). The euphoria seems to have quickly settled as we end the week with double-digit 4.5R numbers, but the MBI still stays in the green.
Broad indices are sustaining consistently above their 10-day moving averages. More than half of the stocks are trading above their 10-day moving averages, and, favoring the bulls, the 10% breadth is above the 20% breadth.
Swing Confidence is 50, indicating that the portfolio can take half the maximum permissible open risk.
Momentum → Negative but improving
The overall market has negative but improving momentum, as the momentum score is below the zero line but above its 9-period moving average.
Metals, Commodities, PSE & Power are the stronger sectors at the moment. These have positive + improving momentum.
Defence, Pharma & IT are having negative & worsening momentum.
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