Alpha.India – Are Banks ready to underperform?

As illustrated in our long only – short only perspective, buying Indian Banks would have brought serious gains in the past few weeks (SBI – 24%, ICBK – 16%, NSEBANK – 16% and HDBK – 10%). The important question to ask here is whether this positive minor trend is still ongoing or the top is near. NSEBANK is at high rankings, suggesting that the positive performance might turn soon, triggering an underperformance of the Indian Banking stocks in the next few weeks.
We illustrated here our minor and intermediate view on the index. The larger view sees the current structure as a completing intermediate (Z) leg up which is heading to key resistances at psychological 12,000 levels. The daily view also suggests 12,000 as an important Fib confluence level. RSI momentum over 70 resistances and its non-confirmation also suggest an exhausting upmove. Therefore, our overall view on Banks is up but topping with a potential intermediate reversal near the mentioned resistance. The performance cycle is still positive, suggesting that 12,000 might happen before anything.
The Numeric Ranking suggests Tisco, IDEA and Bharti as the best stocks to sell and ITC, Hero Honda and Reliance Infrastructure as the best stocks to buy. On the sector side, Consumer Durables is still at the top (best sector to sell), followed by BSEBANK, BSEAUTO and NIFTY. The Volatility Index remains at the bottom, preceded by BSEOIL and Healthcare.
Our overall view on the Indian market remains up but topping. Nifty reached our anticipated resistances at 5,600-5,650 levels. Above respective resistances we are looking at a potential extension till 5,700-5,800 levels at most. The structure looks topping and both weekly and daily RSI suggest an exhaustion soon. The Volatility index made a new minor low (14.35 levels), but the overall structure and the bottoming performance cycle suggest a turn from here and a rise in volatility ahead. The Indian rupee moves in a corrective triangle structure which should complete near key supports at 46 levels. Above 47 our triangle scenario is confirmed.
Our long only – short only tracker carries four new buy signals on ACC, CNXIT, DLF and Infosys. The Numeric Ranking filter suggests Infosys as the best buy and Reliance as the best sell. The top winner is SBI, as mentioned prior, with 24% gains, followed by NSEBANK and ICBK. The positive signal on the respective winners is still running.
The latest Alpha India carries pair tracker signals, numeric ranking, numeric ranking changes, performance cycles. For more information on Alpha India mail us at support@orpheus.asia
Performance Cycles




Michesan Anna-Maria, the columnist for the WAVES.INDIA weekly and Head of India Research. Anna discovered her interest of markets immediately after completing her graduate studies in Economics. She followed it up with post graduate studies in corporate finance. A host of research work in behavioral finance, option strategies and quantifying market sentiment followed. Anna covers Indian equity and combines Elliott, Time Fractals and Time Analytics to deliver accuracy across time frames. To review some of her work, check out the annual India accuracy report 2009.
India Accuracy Report 2009
Alpha India

Alpha is a pair trading, long only – short only strategy and Numeric Ranking product based on TIME fractals. Time arbitrage, Time Triads, Time fractals are terms coined by Orpheus Research. The signals are carried over three different time frames viz. sub minor (2-3 days), minor (10-30 days) and intermediate (above 30 days). This is a daily signal product. The signals will be illustrated through tracker and running portfolios. Alpha can be used by fund managers for relative allocations, traders for leverage bets and high net worth clients for selective trades. This is a part of the time triads analytics developed by Orpheus Research.
Performance cycles is a term coined by Orpheus Capitals. This is another name for time triads, time arbitrage, time fractals but expressed in terms of relative performance. It’s a bounded oscillator that moves in a range say from 1 to 30. 1 is top relative performance and 30 is worst performance. The idea is that performance is cyclical. A top performer will underperform in future and vice versa. A top relative performer is also the worst value pick and the top relative underperformer is the best value pick.
Time arbitrage portfolio legs should be risk weighted before any implementation.
Coverage India: BSE Health Care and components
Stop loss and exits are activated at 4%
Performance cycles is a term coined by Orpheus Capitals. This is another name for time triads, time arbitrage, time fractals but expressed in terms of relative performance. It’s a bounded oscillator that moves in a range say from 1 to 30. 1 is top relative performance and 30 is worst performance. The idea is that performance is cyclical. A top performer will underperform in future and vice versa. A top relative performer is also the worst value pick and the top relative underperformer is the best value pick.
*This is a strategy product. Long Short strategies are not riskless strategies. Please mail us for a detailed working or consult a local financial risk manager to execute these pairs. For more details please subscribe to the ORPHEUS TIME ANALYTICS research products.
Time is a social construct and we see time through the life and nature around us. Understanding time can not only give a unifying theory to research of a few thousand years, but also help us understand the world we live in. Time evolves, oscillates and continues. Time comes before everything, but we don’t see it. We just feel it. We believe what we see and this is why understanding what we don’t see is a challenge. Understanding time could bring more than a conventional thought down, it’s a revolution, which could rock the very foundation of economic thought or the geometric structures Euclid laid down in 300 BC. We are at the start of the journey, but if time is indeed the real mathematics, we could see high accuracy in time forecasts.
Econohistory is the study of performance cycles between assets. Cycles are the generic name for time fractals. Performance cycles can be studied for any time frame, for as small as a tick data to multiyear time frames. This objective approach to performance cyclicality can explain why intermarket analysis is an area of study? Why bonds and commodities tend to be inversely related? What is the connection of Oil with world markets? Why the world watches DOW sometimes and sometimes a 500 point effect on DOW seems to have no impact? Why correlation between assets moves from near perfect at times to weak correlation at other times? Why the same news has different impact on a stock or market? Why equities and bond trend together and why the relationship decouples sometime? When will inflation become deflation, disinflation, stagflation or hyperinflation? When and why does gold outperform and underperform silver? Econohistory can objectively answer these questions, using performance cycles, time fractals and past data. Economic history is mathematical.
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