Week's Price Volume Action - 16th Mar'24

All the Price Volume action at one place !

Mar 17, 2024

Hello All,

More bloodbath this week for Small cap stocks ! Only Index which closed in positive was the IT index, rest all closed in red. The PE of Nifty Smallcap100 is now 27x from 29x last week. Out of 100, 64 stocks have shed more than 5% in last 1 month.

Indian markets are experiencing a significant shift in sentiment. The transition from a strong bullish trend to a more balanced or bearish one can indeed create opportunities for investors. Mean-reversion, where markets return to their average levels after an extended period of bullishness or bearishness, is a common phenomenon in financial markets. It's essential for market participants to adapt their strategies accordingly during such transitions to navigate the changing landscape effectively. How are you approaching this shift in market dynamics?

Now let's find out what stories did the other numbers tell us this week? In case you are new here, the about page for our Newsletter is here and the
last newsletter is here!

Now Lets Goooo !

How have the Sectors panned out last week?

All sectors in Red except Software (+0.67%)for this week.

At the Bottom - Realty:

Top 5 Losers from ( >5000cr Mcap & < 10% Weekly Change)
- DB Realty : -22%
- Sobha: -18%
- Swan Energy: -17%
- Macrotech Dev: -14%
- Anant Raj: -14%

Top 5 Indices this Month

Bottom 5 Indices this Month

Indices Performances HeatMap

How to read this ?
For 5Y, returns are max for S&P Industrials at 309% (Greenest) and min for Nifty Media at -20% (Red). Similarly, one can check for each time period. The table is sorted by 5Y returns.

Nifty Returns over different periods

Out of 50, 45 stocks gave >5% returns in last 1 year and 35 gave >5% in last 6 months.
→ In last 1 year, 33 have beaten the Nifty 50 returns (30%).
→ 2 out of the 50, gave >100% returns in last 1 year. (Bajaj Auto & Tata Motors)
→ In last 3 years, 28 have beaten the Nifty 50 returns (48%).

Out of 50, 18 companies gave >50% returns in last 1 year - Tata Motors, Bajaj Auto, Hero Moto, Adani Ports, Coal India, NTPC Ltd., BPCL, Tata Consumer, Adani Enterprises, ONGC, Cipla, Sun Pharma, L&T, Bharti Airtel, Power Grid, M&M, HCL Tech. & Titan.

→ While only 3 companies gave negative returns in last 1 year. These are UPL (-32%), HDFC BANK (-6%) & HUL (-3%). These have not given any returns in last 3 years.

Nifty PE (Black) and Nifty Price (Pink) Chart

Nifty 50 PE Ratio

The Current PE = 23.2 ( Above Average ) and Avg PE at different time periods are :

1M = 22.9 ; 3M = 22.8 ; 6M = 22.3
1Y = 22.1 ; 2Y = 21.6 ; 5Y = 25.9

Stocks Touching 10 year high !

There can be others also which might be not part of the list but sharing here only those which have good ROCE/ROE/OPM/Revenue growth and also not overvalued.

Number of stocks have drastically reduce in last 2 editions, no wonder why !

Looking ahead, the primary event on the horizon is undoubtedly the election, with a plethora of news likely to fuel market volatility over the next three months. Predicting the market's pre-election behavior is uncertain, but my intuition suggests that volatility will persist, keeping us within the current range. As the election draws nearer, the emergence of exit poll numbers may catalyze trending movements in the market.

Top Monthly Gainers

Share The Curious Investor

Highest Volume Stocks with Good fundamentals :

These are stocks with their End of day BSE+NSE delivery volume trading 2 times of Avg Month NSE+BSE Delivery volume. Volume Multiplier is ratio of delivery of Volume at the end of the day to Average delivery volume for the Month. This indicates

- a surge in investor interest or trading activity.

- increased volatility (Opportunity for Short term).

- speculative risk.

- Improved liquidity.

It's important to note that while increased delivery volume can be a sign of significant market interest, it does not guarantee that the stock will perform well (upside/downside) in the future.

Traders and investors should consider various other factors, such as company fundamentals, market conditions, and their own investment objectives, before making decisions based solely on trading volume data. Additionally, past performance is not indicative of future results, so thorough research and risk management are essential in any strategy.

`These are not recommendations to buy or sell !!`

Back testing

Now, lets see the back test of this strategy over a different periods. The stock selection means that the stocks being selected are either from Nifty 50 or Nifty 500.

Tried out rebalancing of such selected stocks on a different frequencies like monthly or quarterly so that we give the stock a change to perform over such periods and then compare and then do the selection/deselection of the portfolio. Also, to compare the returns, have selected the benchmark performance as Nifty 50/500.

The above comparison gives the strategy 2 as the best strategy keeping quarterly as the best refresh and Nifty 500 as the optimum pool for stock selection. I have checked returns of Nifty 50 as well (Strategy 3) and the benchmark returns have dropped from 281% to 241%.

As per this strategy, if the rebalancing is reduced to Monthly (Strategy 1) the returns drop significantly.

If we limit the stock selection to Nifty 50 (Strategy 4), the strategy returns drop to a meagre 107% which is below par the Nifty50 CAGR.

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All time high Stocks are important to track and how they have historically provided returns is shown below.

I have taken a period of 5 years to back test this and compared the returns with Nifty500 Benchmark.

Stocks with estimated High Bullishness from Analysts

Leaders with Current Price below 200Day EMA

Near 52 Week Low

Solar Industries

Voltamp Transformers

Samhi Hotels

Reddington

Cigniti Tech

Thanks for reading till now. I hope these 5-7 mins have added some value in your analysis.

Thanks,
Curious Investor

Disclaimer: The information provided in this article is for informational purposes only and should not be construed as investment advice. The analysis and insights presented are based on publicly available information, and while efforts have been made to ensure accuracy, we cannot guarantee the completeness or reliability of the information.

Investing in securities carries inherent risks. This post should not be relied upon as a substitute for independent research or consultation with a qualified financial advisor.

The author of this post and the platform on which it is published do not provide personalized investment recommendations or financial advisory services. Any investment or trading decisions you make based on the information provided in this post are solely at your own risk.

Neither the author nor the platform shall be held responsible or liable for any loss or damage arising directly or indirectly from the use of or reliance on the information contained in this post. Readers are encouraged to conduct their own due diligence and seek professional advice before making any investment decisions.

The Curious Investor