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TechnoFunda Investing Newsletter
Weekly Wrap - Issue # 22
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Welcome to the Technofunda Investing community. Thank you for being Life Long Learner...!!!
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π Market Kya Lagta Hai
Nifty 50 π» -1.65%
Midcap 150 π» -2.28%
Smallcap 250 π» -1.04%
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Book Signings in Delhi Today
Sectors in Focus
Major Corporate Developments This Week
- Inox Wind secured repeat order for 210 MW for its 3 MW WTGs from Hero Future Energies.
- Coal India: Government sets target of producing 170 million tonnes of coal from captive and commercial coal blocks in FY25.
- AurionPro board approved acquisition of up to 67% stake in Arya.ai at Rs. 135 cr. Aurionpro will significantly enhance its portfolio of enterprise fintech offerings to expedite the adoption of AI that is responsible, accurate, and auditable, aligning strongly with the rapidly evolving demands of Banks and Insurers.
- The Board of Directors of Premier Explosives at its meeting held on April 19, 2024, has approved the sub-division / split of existing 1 Equity Share of face value of Rs.10 each, fully paid up into 5 Equity Shares of face value of Rs. 2/- each.
- Rail Vikas Nigam Ltd (RVNL) has signed MoU with M/s. Turkish Engineering Consulting & Contracting - TUMAS India Pvt Ltd for Partnership and collaboration in public transportation projects and infrastructure projects in India.
- Suzlon Energy: Company gets interim stay from Gujarat High Court against nearly βΉ261 crore penalty.
- Gokaldas Exports: Company opens QIP today, floor price at βΉ789.99/sh. Seeks to raise up to βΉ600 crore via QIP.
- Mahindra Lifespace: Company has received booking for more than 150 homes within just 2 days, valuing at Rs 350 crore.
- Vesuvius India: Company inaugurated a new Mould Flux plant in Visakhapatnam to increase investment outlay to up to Rs 1,000 crore to strengthen manufacturing capabilities in India.
- Jubilant Pharmova: U.S. FDA intimates inspection classification as 'Voluntary Action Indicated' for unit's Roorkee manufacturing facility.
- TARC: Company's FY24 pre-sales at Rs 1,612 crore, up 200% year-on-year.
- Shilpa Med: Ages, Austria Issues GMP Certification for Shilpa Medicareβs Unit 4, Jadcherla, Telangana.
- Power Grid: Company has been declared as the successful bidder to establish inter-state transmission system in Gujarat and Rajasthan.
- Jio Financial Services: Company and BlackRock in 50:50 JV for wealth management, brokerage business.
- Ramkrishna Forgings: Company receives Rs 270 crore order from consortium led by BHEL.
- Titan: Apple in talks with Titan's arm to assemble and manufacture iPhone components.
- Mphasis: Company has signed a multi-year global strategic collaboration agreement with Amazon Web Services (AWS).
- GAIL/Petronet/NTPC/GIPCL: Government invokes section 11 of the Electricity Act. India will operationalize gas-based power plants to meet summer electricity demand.
- Kolte-Patil: Company clocked Highest-ever annual sales value of βΉ2,822 crore, a growth of 26% from last year.
TechnoFunda Investing Quote from Legends -
Peter Lynch's quote underscores the significance of prudent financial management beyond the mere accumulation of income. He suggests that true financial prosperity stems not just from how much one earns but from the ability to save and wisely invest that income. This philosophy champions the idea of long-term financial health through active management of one's finances, highlighting that it is the decisions made with the money earned, rather than the amount itself, that shapes oneβs financial future.
π Book I'm Reading This Week
Annie Duke, a former World Series of Poker champion turned business consultant, draws on examples from business, sports, politics, and (of course) poker to share tools anyone can use to embrace uncertainty and make better decisions. For most people, it's difficult to say "I'm not sure" in a world that values and, even, rewards the appearance of certainty. But professional poker players are comfortable with the fact that great decisions don't always lead to great outcomes and bad decisions don't always lead to bad outcomes. By shifting your thinking from a need for certainty to a goal of accurately assessing what you know and what you don't, you'll be less vulnerable to reactive emotions, knee-jerk biases, and destructive habits in your decision making. You'll become more confident, calm, compassionate and successful in the long run.
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TechnoFunda 101 - Power Capsules
Learn technical as well as fundamental concept in a simple way
The Double bottom formation
Last week, we discussed all about the cup-with-handle base. Today, we will look at the double-bottom base. While its shape differs from that of a cup-with-handle, the core concepts and the backstory of double bottoms are the same.
Double bottoms tend to form while the overall market is volatile, and that's reflected in the shape. You have one down leg, then the stock tries to rally but hits resistance and ends up pulling back to form a second down leg. The stock rebounds one more time and is finally able to punch through and move higher. The breakout typically occurs when the overall market has also bounced back from a correction into a new uptrend.
The double bottom is shaped like the letter W. An important distinction is that the second leg down should undercut the first. IBD founder and Chairman William O'Neil, who developed the chart-reading strategy over the past six decades, says the undercut of the second leg β even by just a penny β is a necessary shakeout, as a final purge of weak holders, before the stock can advance. In that respect, it serves a similar use to the handle in a cup-with-handle base.
Many of the requirements for a double bottom are similar to those for a cup with handle. There should be a prior uptrend. The base should be a minimum of seven weeks. The correction should be moderate, usually 20% to 30% from high to low. Or a bit more if the market has had a severe correction. Many stocks form double bottoms and shoot straight past the buy point into profitable territory. It's ideal to see the stock's volume pick up at least 40% to 50% above its 50-day average at the breakout.
The Buy Point
The buy point for a double bottom is above the most recent area of resistance. That's the peak in the middle of the W. Breaking through that resistance on unusually heavy volume shows institutional investors are back in the game, aggressively scooping up shares. Note how the bottom of the second leg in a double bottom undercuts the bottom of the first leg. That gets rid of the weaker holders, leaving more committed investors who create support for the stock's new run.
ποΈ My Weekly Podcast For You
Keep Compounding...
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Vivek Mashrani, CFA
Founder, TechnoFunda Investing
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