Abhinit Kulkarni
Nov 2, 20212 min
TEQUITY NEWSLETTER: Issue #1, 2nd Nov 2021
Dear Reader,
Wishing all our readers a very happy and prosperous Diwali🎆🎇🎉
May you find the strength to recover from all sorts of losses faced by you during the pandemic and come out stronger than ever before.
Welcome to the Tequity Investing Newsletter. This is a medium via which we will share our thoughts, important news and some cool statistics on the markets on a weekly or bi-weekly basis. We hope this adds value to you. 🙏
Let’s begin!
Have a look a the NIFTY 50 chart
Technical View: The last time NIFTY 50 touched the 50 day moving average was on July 27th 2021(NIFTY: 15700). The bull run that began in early October peaked on the 19th with NIFTY making ATH of 18604. Since then the index has fallen 5.5% in a matter of 10 days to end the October month at a modest 0.8% in the green. On the 19th of October, few would have predicted that we would see the index touching its 50dma within the next 2 weeks, but just that has happened.
The weekly and monthly charts remain bullish, while the daily charts are showing weakness. 17600⏬ and 17950⏫ are the key support and resistance levels to look out for.
Fundamental View: Q2 FY22 results have in general come in robust with manufacturing, power, banking and automotive sectors showing a strong recovery. Even the laggard tourism and realty sectors are recovering. In their management commentaries, many companies warned about rising input costs, which could put pressure to margins and the demand outlook. Commodities, led by crude, are also seeing high inflation, as prices have soared. The reasons for these have been a mixture of things which include: developed nations central banks monetary easing flooding the markets with liquidity, supply-demand shocks due to the pandemic and geo political pressures especially from China which is strictly regulating its internal industry and trade policy.
The NIFTY is trading at PE levels of about 26 which is a comfortable ratio given its historical context. With a robust Q2 and central banks showing no signs of tapering, the recent dip could be reasoned as an opportunity to buy the dip
Sectoral View
Barring PSU Banks, all indices fared poorly with some correcting as much as 7%.
Tequity Smallcase Performance and Rebalances
Momentum Bull
The momentum bull smallcase is for short and medium term investors to benefit from the bull market. It’s objective is to help investors make short term gains by investing in momentum stocks. Opportunities are identified by our expert team by employing a tested techo-fundamental screening process. Holding duration of individual stocks is from 1 week to 3 months and rebalancing is done weekly.
Rebalance Exits This week for Momentum Bull Smallcase:
2. The Middle-Class Businessmen Smallcase
This is our flagship smallcase launched in 2020. The smallcase focuses on fundamentally strong stocks with a firm focus on clean family run businesses with strong corporate governance track records. The smallcase invests in a healthy mix of small, mid and large cap companies and has vastly outperformed benchmark indices and most other smallcases in the category since inception.
Rebalance Updates: Quarterly Rebalancing strategy. No recent updates
Middle Class Businessmen Smallcase Fund Performance:
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Happy Investing...