WeekendInvesting Daily Byte : 27 Sep 2023

September 27, 2023 3 min read


The market is showing signs of a potential turnaround, with an interim bottom at 19,550 and a bullish engulfing candle. This indicates a possible “dead cat bounce” towards 9,900. However, it is important to observe how the next few days unfold to get a clearer picture of the market’s direction. This is a very promising sign after 6 days of a downward move.

Nifty Heatmap

Mixed heatmap today. Despite a six-day period of decline, there are several gainers in the market. Companies such as ITC, Coal India, Reliance, Axis Bank, L&T ,Bharti Airtel, Adani Enterprise, Sun Pharma, and Maruti have experienced positive growth. On the other hand, Grassim, Titan, and HDFC Bank have been losing positions. HDFC Bank, along with ICC Bank and State Bank, are pulling the Bank Nifty down, which is not an ideal situation after a prolonged fall. The fall in some of the banking names has not yet stopped.

Sectoral Overview

Pharmaceutical stocks have made a good comeback after a loss of 1.9% last week, gaining 1.2% this week. The net loss for PSU banks was 1.9%, while FMCG, real estate, infrastructure saw 0.7-0.8% up, energy, and consumption stocks saw gains. Bank Nifty remains the only loser, followed by commodities, metals, and auto, which have remained relatively flat.

Mid Caps & Small Caps Performance

Despite the mixed performance of the overall market, mid-cap companies are showing promising signs. After a major decline on the Tuesday of previous to previous week, the market seems to have recovered a bit, building momentum for a potential challenge to reach 41,000, followed by the all-time high.

Small caps also saw a three day high and are expected to gain momentum, aiming for 12,400 and possibly 12,600 in due course.

Bank Nifty

Bank Nifty is where the main issue still exists where it was unable to take out yesterday’s high and still reeling near 44,600 mark

Stocks in Focus – Power Finance Corporation (PFC)

Now let’s shift our focus to a specific stock, Power Finance Corporation (PFC). Over the past decade, PFC has not demonstrated any significant upward trend, giving investors not so substantial returns. It is crucial not to categorise stocks based on their past performance, as any stock can experience unexpected changes. The movement of stocks in the market is influenced by various factors, and history does not always repeat itself.

Therefore, it is important to keep an open mind when analysing stock trends. Even if a stock has had multiple failed breakouts in the past, it does not mean it will underperform in the future. Investors should seize opportunities when a stock shows signs of a breakout, as it holds the potential for significant growth.

PFC serves as a prime example, with the stock soaring from Rs75 to 249 in less than a year. In many of our Weekendinvesting Strategies, we were able to capture this trend at around 120 were able to benefit greatly from this opportunity.

It is vital to avoid biases and let objective analysis guide your investment decisions. In the stock market, anything can happen, and stocks that have remained steady for a long time can suddenly experience significant price fluctuations. It is crucial to evaluate each breakout individually, regardless of past performance, as this breakout may be the one that leads to substantial returns.

To gain more clarity on overcoming biases and making informed investment decisions, do check out our video on the Weekend Investing app. It provides valuable insights into the importance of maintaining an open mind when analysing the stock market.

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    WeekendInvesting Daily Byte : 27 Sep 2023