The Good Bad and Ugly weekly review : 04 Aug 2023

8 min read

Introduction

Hello and welcome to this week’s market analysis report for the week ending on August 4th. In the past week, we witnessed some interesting movements in the market. Let’s take a closer look at the events that unfolded and their impact on various sectors.

Market Overview

The week started off on a positive note, with the market experiencing an upward trend on day one. However, on the following day, it plateaued, and things took a sharp downturn due to Fitch’s downgrade of the US. Fortunately, there was a nice bounce towards the end of the week, although it was unable to surpass the previous day’s high. Overall, it seems like a period of consolidation after the market almost reached the 20,000 mark on July 20th. This correction is not particularly alarming and is a natural part of market cycles.

Taking a look at the weekly chart of the Nifty, we can see a consistent upward trend since mid-March, with only a slight pullback recently. Even if the market experiences a further decline to around 18,800, it shouldn’t come as a surprise, as corrections and consolidation are necessary for the health and stability of the market.

Sectoral Review

In terms of sectoral performance, IT stocks were the strongest performers, with a 3.2% increase. The pharma industry also showed positive signs, with many previously dormant pharma stocks showing signs of revival and upward movement, resulting in a 1.9% increase. On the other hand, commodity stocks remained relatively flat, with metals experiencing a slight decline of 0.3%. Public sector enterprises and private banks also saw a minor decline of 0.3% and 0.6%, respectively.

The Nifty itself experienced a minimal decline of 0.7%, while energy, infrastructure, and the bank nifty saw declines ranging from 0.5% to 1.5%. The auto sector witnessed a 1.4% decline, while consumption and FMCG also experienced downturns of 1.6% and 1.7%, respectively. However, the most heavily hit sectors were the PSU banks and the real estate sector, both seeing a significant decline of around 4%.

Taking a broader perspective of the financial year’s performance so far, we can observe that real estate has been the best-performing sector, with a remarkable 39% increase. Pharma also saw substantial growth, with a 27% increase, followed closely by the auto sector at 25.2%.

Looking at the indices, the Nifty experienced a gain of 12.4% this FY 24. Other indices, such as CNX 200 and CNX 500, showed gains in the range of 15% to 16%, while Nifty Next 50 saw an increase of 18%. Mid and small caps and the small cap 250 performed exceptionally well, with strong gains of 25% to 29%.

WeekendInvesting Review

Unfortunately, all strategy performance results were in the red for the week, with only the Mi 50 strategy eking out a small gain. Despite the market’s performance, we had expected the Mi 20 and Mi 35 strategies, along with the mid and small cap and small cap 250, to perform well but to no avail. However, on a year-to-date basis, these strategies have had impressive results.

Since April 1st, the Mi 20 strategy has shown a gain of 40%, while the Mi 35 and Mi 50 have gained 36% and 37% respectively. The Mi 25 and Mi 30 strategies have also shown positive performance with gains of 23.4% and 25.3% respectively. Additionally, the Mi NNF 10 strategy, which had a rocky start in the first quarter of the calendar year, has made a strong comeback with a gain of 22.6%. However, Mi Ath is still lagging behind with a gain of 14.3%. Overall, the Mi All Cap strategy has gained slight ground at 18.6%.

In conclusion, the market experienced some volatility this week, but it’s important to note that these fluctuations are part of the normal market cycle. While certain sectors and strategies performed better than others, it’s crucial to analyze long-term trends and make informed investment decisions.

As we move forward into the next week, let’s keep a close eye on the market and its potential for improvement. Remember to always stay informed, do thorough research, and consult with financial professionals before making any investment decisions.

Thank you for taking the time to read this week’s market analysis report. We value your feedback on the newly introduced format and welcome any suggestions for improvement. Here’s to a successful week in the markets ahead!

Spotlight – Mi ATH 2

The spotlight for this week falls on the Mi ATH 2 strategy. After a shaky start two years ago, the performance of this strategy has staged a good come back, with a remarkable 42% gain over the past year, compared to a 23% gain on the CNX 500. The initial hiccups of this strategy seem to be behind us, and we can expect positive performance going forward.

Road to Financial Freedom – Ep 02

SHORT COURSE to Help you Stay Calm in All Market Conditions

Usually, quick – sharp corrections amidst a Bull Run creates ambiguity in the minds of lots of new investors. The most important question we often get asked is whether markets will crash from here. Should we exit? and a few other questions like these. We have made several videos to help you clarify many such questions and help you have the RIGHT MINDSET for a rewarding journey in investing.

We have put together a few of our previous Daily Bytes which we think might be relevant for times like these. Do have a look and send us your thoughts, questions or comments if any.

The smallcase products are all LONG ONLY products that invest in various subsegments of the markets but have the momentum theme underlying in all of them. The strategies will pick strong outperforming stocks and remove weak ones once a week (except Mi NNF10, Mi EverGreen & Mi India Top 10 which is monthly rebalanced)

These are all long-term strategies that will create enormous wealth in each upswing and then maybe give some back in the downswing and repeat this process again and again achieving the compounding effect. With patience and grit to follow strategy over ups and downs over the last nearly five years, it has been shown that much superior CAGR returns are possible than the benchmarks.

We give advance notice here on the upcoming changes in your smallcase for Monday. This advance notice can be used to ignore Monday’s update if there is no change. If there is a change indicated you can use the smallcase app or log in to weekendinvesting.smallcase.com to see the rebalance. A backup email is sent by mid-day Monday if you have not rebalanced by then and yet another one a day later.

Note: We are not including LIQUIDBEES as an ADD or an EXIT count.

The performance of all strategies across various timeframes are listed below.

WeekendInvesting Products – LIVE Index Data

Many of you had asked us to make the index series of all WeekendInvesting Products available so that you could perform your own analysis and studies. You can find a link to the LIVE sheet here and also on the HUB under the support column in the content tab.

WeekendInvesting Telegram and YouTube Channel

We post daily content related to investing on our Weekendinvesting Telegram Channel and YouTube channel to help our community take stock of the performance of markets, sectors & our products and touch base upon a new topic every day. We look forward to having you all there! Several videos in this blog are from this series.

Introducing M Profit

STAIRS Revamped Models

STAIRS is a LONG / SHORT derivative strategy that is designed to offer an uncorrelated diversification option to your equity portfolio. STAIRS will do well when there are up trends & also when there are down trends while giving up some of the gains when markets remain rangebound/volatile.

You may go through our latest weekly report for more details.

All STAIRS models go in line with our fundamental philosophy of making the most and compounding aggressively when markets give us trends and go very defensive as trends fizzle out and enter a rangebound territory, thus providing robust capital & profit protection.

Effectively – STAIRS is a complete trading system (Futures & Options) that covers each of the following decisions required for a successful trading outcome:

• Markets – What to buy or sell?

• Position Sizing – How much to buy or sell?

• Entries – When to buy or sell?

• Stops – When to get out of a losing position?

• Exits – When to get out of a winning position?

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    The Good Bad and Ugly weekly review : 04 Aug 2023