Ultra Large Cap

There is a beautiful saying: Focus on what the market is doing and not what it should be doing. Also, Focus on money management and risk management. The market believes the economy may be turning a corner. And at this point in time, instead of intellectualizing and debating, focus on the pocket of opportunities and develop trading plans to make up for all the damage market did over the last 10 months. Here are some interesting price action stories.

[Read more…] about The Opportunity Market

The market disappointed so much in 1HCY2022 that the last few weeks have come as a big relief for Long only investors/traders. There is follow-through buying happening despite concerns around the US-China conflict. You must be wondering what has changed. It’s traders’ enthusiasm and some +ve newsflow like cool off in commodity prices and new legislation. The three themes driving the market right now:

1. Inflation Reduction Act Bill of 2022
2. Chips Act
3. Earnings Surprise

Here’s how some of the well-traded large-cap stocks behaved over the last six weeks. The list will help you understand how trades unfolded, where the opportunities are and how should one keep an eye on potential opportunities and risks. This is a 3 part weekend series. This blog only covers Large cap stocks i.e. stocks with a market cap of more than $10 billion. The trading ideas here are suitable for investors who want to invest in stable steady companies.

[Read more…] about Large Cap Momentum Market

The US retail sales rose 0.9% in April and 0.6% excluding autos, slightly above the consensus estimates. This is the fourth consecutive increase in monthly U.S. retail sales. The US consumer continues to shop but inflation is impacting its spending power. Also, after a long time, the market has greeted good news with a good bounce. S&P 500 is up 1.4%. Despite early morning pressure, the US market is trading with lots of strength. 

[Read more…] about Good Retail Sales and Oversold Bounce

S&P 500 headed toward its third-down week in a row. The bears are in complete control. Every small rally in stock is aggressively sold into. Federal Reserve chair Jerome Powell has now set the stage for 50 bps rate hikes in the next few meetings and the market is worried that aggressive rate hikes might trigger a full-scale economic recession. Hawkish Central Banks and rising US bond yield is scaring everyone. S&P 500 after a brutal sell-off yesterday is down another 1.24% today.

[Read more…] about Large Cap Money Flow Newsletter 2204/22

Revenge Travel is for real and most airline companies continue to confirm the trend. This was known but what got the market excited is that despite inflationary pressures and higher fuel costs, airline companies are easily able to pass on the costs. Today, the ETF representing Airline companies JETS is up 5%. I recommended JETS as a buy a few days back and it seems now the trend is gathering momentum. But what about the broader market – well it continues to struggle. The early morning excitement has disappeared with the pick-up in selling pressure. 

[Read more…] about Large Cap Money Flow Newsletter 2104/22

In the stock market, there is always some drama happening and today the company that makes the drama is the center of the drama. Netflix stock is down 35% post-earnings. It’s consuming all the bandwidth today but there are lots of fascinating moves that seem to be happening too. Let us focus on a few stocks that should get your attention today.
[Read more…] about Large Cap Money Flow Newsletter 2004/22

Extreme Pessimism can drive stocks higher. Nothing else can explain the vertical rally one can see in S&P 500 today. The rally is coming on the back of lower volumes. Fundamentals continue to look ugly. The 10 Year yield now stands above 2.9% and is approaching the 3% mark for the first time since December 2018. 
[Read more…] about Large Cap Money Flow Newsletter 1904/22