|
TechnoFunda Investing Newsletter
Weekly Wrap - Issue # 65
|
|
|
|
|
|
Welcome to the Technofunda Investing community. Thank you for being Life Long Learner...!!!
Share this newsletter Via: LinkedIn, WhatsApp, Twitter
You can view all previous newsletters here
📈 Market Kya Lagta Hai
Nifty 50 🔻-0.16%
Midcap 150 🟢 +1.82%
Smallcap 250 🟢 +1.25%
|
Sectors in Focus
Major Corporate Developments This Week
- Anant Raj: Company partners with CSC Data Services for data centre and cloud solutions
- NTPC: Company plans to spend $62 bn on 30 GW of nuclear power over 2 decades, 3 times more than expected.
- LTIMindtree: Company partners with Greece’s Eurobank for multi-year banking tech revamp.
- Uflex: Company is investing over Rs 750 crore to set up a woven polypropylene bags manufacturing plant in Mexico.
- Uno Minda: Company approved a joint venture with Suzhou lnovance Automotive Co. Ltd for powertrain projects.
- DCX Systems: Company is establishing new manufacturing units in Bengaluru for Cable & Wire Harness Assemblies, Printed Circuit Board Assemblies, and Electronic Sub-Assemblies.
- Bharat Forge: Company unveils Marg 45 Cal Mounted Gun System
- Deepak Fertilizer: Deepak Mining Solutions increases stake in Platinum Blasting Services to 85%.
- Agarwal Industrial: Co wins order worth rupees 300 cr from BPCL.
- Jyoti Structures: Co's first unit at Nasik in August 2022, having annual manufacturing capacity of 36,000 MT. Second unit will add 33,000 MT of annual manufacturing capacity to the company. Jyoti Structures: Co plan for restarting the company’s third tower manufacturing unit at Raipur having annual manufacturing capacity of 40,000 MT, are being kept ready for implementation.
- Ramco Systems: Co gets client Fly Vaayu to propel its growth journey with Ramco Aviation.
- India Glycols: Co allocated 180.6M liters of ethanol supply through tender. Estimated value aggregating to 12.64B rupees under ethanol blended petrol programme.
- JBM Auto: Co wins order worth 5500 cr rupees.
- Transformers and Rectifiers (India): Co secures orders worth 1.66B rupees for supply of single phase coupling transformers and single phase for TBCB projects.
- Uno Minda: Co says approval for formation of joint venture (JV) with Suzhou Inovance Automotive Co. Ltd. JV company shall carry on business of 4W PV & CV EV powertrain products.
- Cyient DLM: Co secures long-term avionics manufacturing award from Thales.
- Biocon: European Commission approves Biocon Biologics’ Ustekinumab biosimilar.
- Reliance Industries: Programme agreement signed with Reliance New Energy Battery Limited for 10 GWh capacity under the PLI for Advanced Chemistry Cell (ACC) scheme.
- Zydus Lifesciences: Co receives final approval from USFDA for ibuprofen and famotidine tablets, 800 mg/26.6 mg.
- SRF: Co commissions remaining part of fluorocarbon refrigerant gas project. Project commissioned at aggregate cost of 3.61B rupees.
TechnoFunda Investing Quote from Legends -
In this quote, Peter Lynch emphasizes the importance of focusing on the potential upside of winning investments rather than worrying about occasional losses. He suggests that even if you are right only half the time or slightly more, the key to successful investing is letting your winners run. When you invest in companies with high growth potential, the gains can be exponential—sometimes 4, 10, or even 20 times your initial investment. These big winners more than compensate for the losses incurred from other investments that may decline in value or even go to zero, ultimately leading to a profitable overall portfolio.
📚 Book I'm Reading This Week
"The Almanack of Naval Ravikant" is a compilation of insights and wisdom from Naval Ravikant, a successful entrepreneur, investor, and philosopher known for his profound perspectives on wealth, happiness, and life. Curated by Eric Jorgenson, the book distills Naval's thoughts from his podcasts, tweets, and interviews into timeless principles on building wealth, achieving long-term happiness, and living a fulfilling life. It explores ideas on leveraging technology, embracing leverage, making better decisions, and cultivating inner peace, making it a valuable guide for personal growth and financial independence.
|
TechnoFunda 101 - Power Capsules
Learn technical as well as fundamental concept in a simple way
The Dow Theory – A Timeless Blueprint for Market Analysis
The Dow Theory is one of the oldest and most influential frameworks in technical analysis. Developed by Charles Dow in the late 19th century, this theory lays the foundation for understanding market trends and guiding investment decisions. In this week’s edition, we’ll break down the core principles of the Dow Theory, explore how it can be applied in today’s markets, and discuss its relevance for modern investors.
What is the Dow Theory?
At its heart, the Dow Theory is built on the premise that market trends can be identified, confirmed, and followed. It relies on a few key principles:
- Market Trends Exist: Markets move in identifiable trends—up, down, or sideways.
- The Market Discounts Everything: According to the theory, all known information (news, economic indicators, etc.) is already reflected in market prices.
- Trends Have Three Phases: An uptrend, for instance, is characterized by an accumulation phase, a public participation phase, and a distribution phase.
- Confirmation is Key: Dow believed that a trend is only valid when confirmed by multiple indices. For example, both the industrial and transportation averages should confirm the market’s direction.
- Trends Continue Until a Clear Reversal Occurs: The Dow Theory emphasizes that trends tend to persist and will continue until definitive signals indicate a reversal.
-
Key Components of the Dow Theory
-
Trend Identification and Phases:
- Primary Trends: These are the long-term movements, lasting years, that define the market’s overall direction.
- Secondary Trends: Intermediate corrections within the primary trend that can last weeks or months.
- Minor Trends: Short-term fluctuations, often influenced by daily news or market noise.
-
Confirmation Through Multiple Averages:
- The theory traditionally focuses on the industrial and transportation averages. A trend is considered robust only when both indexes move in tandem, confirming the direction.
-
Volume as a Secondary Confirmation:
- While not as central as price, volume is used to confirm the strength of a trend. Higher volume during an uptrend supports the notion of continued buying interest.
-
Reversal Signals:
- The Dow Theory doesn’t predict reversals with pinpoint accuracy but suggests that a reversal is underway when both averages fail to confirm new highs (in an uptrend) or new lows (in a downtrend).
Applying the Dow Theory in Today’s Markets
Even in the era of algorithmic trading and modern technical indicators, the principles of the Dow Theory remain relevant. Here’s how you can incorporate its insights:
- Identify Primary Trends: Look at long-term charts of major indices to determine if the market is in an uptrend or downtrend.
- Monitor Multiple Indices: Use a combination of indices or ETFs that represent different market sectors to confirm trends.
- Watch for Breakdowns: Notice when an index fails to reach new highs or lows, signaling a potential change in trend.
- Consider Volume: Although price is the primary signal, increasing volume during price moves can validate the strength of the trend.
Why the Dow Theory Matters
- Simplicity and Timelessness: Despite being over a century old, the Dow Theory’s basic principles still hold true. It provides a simple framework for understanding market movements.
- Trend-Following Mindset: By emphasizing the continuation of trends until a clear reversal occurs, the theory encourages disciplined, long-term investing.
- Foundation for Modern Analysis: Many modern technical indicators and strategies are built upon the insights of the Dow Theory, making it a cornerstone of technical analysis.
Conclusion: Harnessing the Dow Theory for Better Investing
The Dow Theory reminds us that markets are driven by trends that can be identified and followed with discipline and patience. By focusing on the primary trends, confirming them across multiple indices, and using volume as a secondary indicator, investors can make more informed decisions and avoid the pitfalls of reacting to short-term market noise.
🎙️ My Weekly Podcast For You
Keep Compounding...
|
|
Vivek Mashrani, CFA
Founder, TechnoFunda Investing
|
|
|
You Can Share This Newsletter...!!!
|
|
|
Follow all my content on my social media handles below
|
Disclaimer:
- The content provided on this page by the publisher is not guaranteed to be accurate or comprehensive. All opinions and statements expressed herein are solely those of the author.
- The information found on this newsletter should not be interpreted as investment advice, nor does it express any viewpoint on the future trading prices of any company's securities. The opinions and information shared here should not be taken as specific guidance for making investment decisions.
- The content, including opinions and expressions, present on this newsletter, is not a direct or indirect offer or solicitation to buy or sell securities or financial instruments mentioned. The securities quoted are for illustration only and are not recommendatory.
- Investment in securities market are subject to market risks. Read all the related documents carefully before investing.
- By accessing the site or affiliated social media accounts, you signify your agreement to this disclaimer and the terms of use.
- Neither the publisher nor its affiliates assume liability for any direct or consequential losses arising directly or indirectly from the use of the information provided in this content.
|
|
|
