The Good Bad and Ugly weekly review : 19 Dec 2023

Markets this week

After a flat movement in the previous week, Nifty saw a significant rise from 29th November to 7th December. However, in the last few days of the previous week, the market experienced a slight decline. The market then took off in the last three sessions after the Federal Reserve announced expectations of three rate cuts next year. As a result, the market is currently pricing in three rate cuts with no further rate hikes anticipated.

It’s important to note that historical data suggests that markets may not continue to rise indefinitely as rates get cut. Typically, markets tend to reach a peak or consolidate after the first rate cut. Therefore, it’s crucial to keep an eye on market trends as we approach the first rate cut, which may occur in March, April, or May.

While many believe that rates will keep getting cut and the market will continue to rise, it’s essential to understand that this scenario is not guaranteed. Markets may still go through rate cuts, but it’s wise to anticipate some consolidation after the initial cut. The Nifty has seen significant growth in a short period, reaching 21,400 from 19,000 just a few weeks ago. This reminds us that markets are unpredictable and can surprise us at any time.

Benchmark Indices Overview

Nifty next 50 was the leader of the current week sitting with 2.7% gains while all other indices ranging between 2.3% and 2.6%. Smallcap 250 has been fantastic this FY 24 clocking gains of 57.3% followed by Mid-small 400 at 51%. Nifty 50 has been quite solid returning 23.6% too.

WeekendInvesting Overview

Mi MT Allcap has come back with a vengeance this year after under performing for about a year and a half clocking 62% this FY 24 and 5.6% this week. This speaks volumes about the importance of staying patient with your strategies and allowing them to maneuver through market cycles. Mi 20 has been exceptional this FY clocking almost 93% nearing the coveted 100% mark. However, a very less known strategy would be Mi 35 which has been a silent performing raking in a superb 76% this FY 24. HNI Wealth Builder has also been doing well clocking 3.1% this week and 72% this FY 24.

Overall, fantastic performance across the board as we near the end of Q3 FY 2024.

Sectoral Overview

IT has come back in an exceptional fashion clocking a massive 7.2% this week with a 24% gain in terms of the FY 24 performance almost in line with Nifty 50. PSU Banks, METALS and PSE have been quite robust occupying the top spots of the week and also the FY 24 table. REALTY continues to do well just under 2% away from 100% gains in FY 24.

IT is the show stopper having secured the first position in the 10 day momentum ranking chart. This index has seen a huge gain from 13th position (in the 20 day chart) to 1st (10 day chart). METALS have slipped to #10 but REALTY 7 PSE have continued to remain robust taking the top 2 spots. GOLD, FMCG & PHARMA took the last places.

SPOTLIGHT – SUZLON in Mi 35

Suzlon witnessed a massive fall of 99.6% from its peak in 2008, dropping from over Rs 400 to as low as Rs 1.5 ( a massive 99.6% fall).

However, since 2020, the stock has shown a remarkable recovery, currently trading at around 38 rupees. Mi 35 entered this stock at 14.7 rupees around mid Jun 2023 and has held it until now, with returns at a superb 163%. This highlights the power of momentum investing where you keep biases and discretion completely away allowing the system to decide the course of action.

Mi 35 has been a superb performer hitting the coveted 2x mark this week.

Rebalance Update

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.

WeekendInvesting Strategies Performance

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WEEKENDINVESTING ANALYTICS PRIVATE LIMITED is a SEBI registered (SEBI Registration No. INH100008717) Research Analyst