Alpha India Indices – The sector filter

Performance is cyclical and works on all timeframes and for all assets. This is why sectors under- and outperform in the same way as individual stocks do. If we look at the three months performances, CNXIT is the top performer with 9.76%, while BSE Realty is the worst with -31.71%. This means that one could have made a 40% profit in three months by simply buying CNXIT and selling BSE Realty.
We looked at the sector performance to filter our top and worst among the various sectors on a multiple time frame or an integrated basis. When we had the best and the worst list of sectors, we knew where to look for stock picking ideas. A worst sector according to performance cycles should outperform and hence should be used for stock picking. While a best sector has already delivered in performance and is expensive. This sector stocks should be avoided in a portfolio.
After the sector filter we shortlisted the best and worst stocks. In the table below we have illustrated the final list of the best sells (reduce) and best buys (hold and accumulates) sector and stocks opportunities.
The top twelve performer stocks, filtered by sector, are: VIP Industries, Titan Industries, Orchid Chemicals, Aurobindo, Canara Bank, HDFC Bank, Bhushan Steel, Tata Steel, Infosys, TCS, Tata Motors and Exide.
The bottom eleven performer stocks (worst rankers) are: United Spirits, Marico, Housing Development and Infrastructure, Hindustan Construction, Gammon, Suzlon, Torrent Power, Reliance Infrastructure, Hindustan Petroleum, Bharat Petroleum and Ackru City.
Enjoy the latest Alpha India.
Alpha is a daily strategy signal product that gives long only, short only, pair trading signals. Alpha is a numeric Ranking product based on TIME fractals. The signals are carried over minor (10-30 days) and intermediate (above 30 days) time frame. The signals are 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.
Naked and/or pair strategies are not riskless strategies. Time arbitrage portfolio legs should be risk weighted before any implementation. 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 Research products.
Coverage India: BSE500 traded stocks and Indian Indices.
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.