Welcome to the last Momentum Monday newsletter before Christmas and global investors are minding their P’s and Q’s as we eagerly await the much expected Santa rally.
Though if 2022 was the year of the Lithium stock, perhaps Santa’s sleigh requires a recharge as we are sputtering to the line.
Much in the same way we had a solid positive period that ran out of puff following the June lows, so too is the market now retracing back from November highs. My experience with Australian investors is that we are genetically disposed to worry.
- When markets go down, obviously we are worried.
- When markets go up, we worry that they will eventually go down
- When markets go sideways, we worry that if it is going to go in any direction it will likely go down.
This is one of the reasons why technical analysis can be so effective, as it helps control our internal bias. Using price charts takes the decision out of our hands, alleviating a great deal of angst and stress. The only exception to this rule is when markets whipsaw, which is what they are doing now, and hence why we are all a little worried.
Before we continue, remember, In Stockopedia momentum doesn’t just mean price moves (though it is a big part of it.)
Just to refresh your memory Stockopedia’s Momentum Rank is a ranking system based on a blend of price momentum and earnings momentum in the form of upgrades, positive revisions to earnings and earnings surprises to learn more read here
In this report we pay no attention to the factors of Quality and/or Value. However, when combined with either of these two factors, an analysis of the charts can be a powerful strategy, if applied with discipline.
Also if you want to see which stocks are discussed in this week's addition, scroll down the list on the right hand side.
Week ended 16 Dec 2022
A second consecutive down week for overseas and domestic markets has put the global situation back under the spotlight. Really, it never went away. However its amazing what a positive run in prices can do to one’s sense of stock picking ability, especially when there is a risk that our best laid plans could potentially come unstuck
* I start this contribution as always with a look at the US S&P500 alongside the S&P/ASX200 as…
