This week:
Last week:
Commentary:
Summary
All types of mutual funds advanced through the week. The advance of equity funds, overall was bit less than the last week, indicating a potential topping for short term. The commodity funds advanced significantly, a whopping 6.61% for the week. It is nice to see no negative return on any type of mutual fund, across any of the short term timeline in the summary table, where as the equity fund returns remained negative for the 3M and annual basis in the last week summary table.
Concern:
The US market corrected significantly on the Friday night session, which will have a knee jerk reaction on the Indian market next week. The new US tariff of additional 100% on China, is just a statement for now, and that alone has sent a negative sentiment globally as there will be further disruptions on the global supply chain arrangements short term. Further, it is indicated that the US policy against China will be a lose-lose deal, therefore the equity markets will at least have a negative knee jerk reaction short term.
Bitcoins corrected significantly as the institutional support for the same shifted from them to stable coins thru new US policy changes. Bitcoin as a safe heaven alternate investment will be shaken short term. Since there are margin call incidents on bitcoin investments, it will have a ripple effect on equity markets too short term. Until bitcoin prices bottom out and resurge, the equity markets may suffer a negative sentiment, this is more of a technical phenomenon.
There is a murmur of some correction against pending corrections on multi-fronts (equity, housing, crypto, commodity etc.). But, the US market is forging ahead on cutting edge fronts like AI, robotics, semiconductors, data centres, energy generation and distribution etc. etc. So, the ongoing froth in these sectors may not be ready for significant correction yet.
Bottom line, there will be volatility on all fronts, leaving retail investors vulnerable on both bullish and bearish fronts. Retail investors are advised to sit tight till the bottoming happens to the current corrections, and look for many other unfolding events in different directions through rest of October. No action either side, with no clarity for medium term level at least pls.
India will go with global sentiments short term on knee jerk reaction. There is a war breaking out between Afghanistan and Pakistan, and the recent Afghan leadership visit to New Delhi suggests India's indirect support to Afghanistan. So, we need to watch this development further.
Opportunity:
The festival season in India will reduce the amplitude of global negative sentiments and associated knee jerk reactions.
India is not yet ready to re-attract the outgoing FII investments, but this fund outflow is expected to further taper ahead, giving further anchor to the declining mutual fund prices.
Finally, we need to talk about commodity funds, overall they remain to be an opportunity. Since both the Gold and Silver hit their interim highs (Gold: USD 4000 per ounce, Silver USD 50 per ounce), there will be a technical correction in both the prices through the next week. In fact, the gullible retail holders of Gold and Silver are lining up to sell their physical holdings in the US, while the rest of the world is enthused to buy more on correction. So, we will see lot of volatility in Gold and Silver prices through the next week, but the overall direction for these metals is way too bullish ahead, and those who missed the rally's so far should exploit the temporary correction and hoard more of performing Gold and Silver funds.
By the end of next week, we will have some bell weather Q2 results in India, though clear picture will emerge on India Q2 performance a week later. Any potential fundamental shift in the Indian equity sentiment due to India business performance needs to wait for a week more.
Yes Bank surged on Friday with a clear technical breakout. Yes Bank is at 24+ level, and there is an anticipation that it will reach 30 level in the next six months. Yes Bank move is kind of a bell weather for recovery story in many of the beaten down financial institutions of India. So, we may anticipate resurgence of these sectors (mid small banks, NBFCs, retail lending, home lending etc.) ahead, but act on it only after confirmation, as global cues can bring havoc on any developing India story, for now.
1. Combined Funds Top 50
1.1. Combined Funds Top 50 Summary
Looking at the Combined Top 50 summary for the week, month and year, the Top 50 averages have been fantastic through this week, primarily due to commodity funds superlative performance. But the bottom 50 funds average also improving, which indicates recovery from the bottom for the underperforming areas, which is good sign for the underperforming equity funds ahead. But, we need to wait for the impact of knee jerk reaction pending for the next week in India due to developing negative sentiments globally.
1.2. Combined Top 50
Green and Amber color marked mutual funds in the list: Since the focus is not only looking for the performance leaders, but also consistent above average performance across all the timelines, the funds are marked in Green or Amber to easily recognize consistency of performance among the leaders.
Green:
If the returns for all the available timelines from 1W thru 1Y is above the average within the list. The fund can not be marked green even with this rule if the returns are not available beyond a month, in which case the fund is marked as amber only.
Amber:
If the returns for all the available timelines from 1W thru 1Y is above the average within the list except for one timeline. For this exception, if any of the weekly and monthly returns are above average, then both timelines are considered to have above average
1.2.1. Combined Weekly Top 50
1.2.2. Combined Monthly Top 50
1.2.3. Combined Annual Top 50
Bearish reversal signs:
Both the weekly and monthly bottom 50 lists are leveraged to identify potential bearish reversal indications of the funds. This is done by marking above average annual return in bold and below average returns for the week and month. The funds with both weekly and monthly below average, but annual above average are marked in darker red, while the funds with only one of the weekly and monthly below averages but with above average annual return are marked in light red.
Bullish reversal signs:
Annual bottom 50 funds list is used to recognize potential bullish reversal. Any fund with above average return for both the week and the month in the list is marked as grey indicating potential bullish reversal.
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Disclaimer:
- This is not a solicitation for mutual fund investment nor an advice. It is only an insight to help investment decisions based on the free MF performance data downloaded from Value Research. Investment decisions are only yours to make.
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