In today’s briefing:
- Bear Market Until Proven Otherwise; Upgrading Industrials to Overweight; Buys Within Industrials
- Mahindra EPC – A Proxy Play on MIS Opportunity
Bear Market Until Proven Otherwise; Upgrading Industrials to Overweight; Buys Within Industrials
- In our Sept.27 Compass, with the S&P 500 down 11.5% during the prior two weeks, we discussed our belief that the market indexes could see a bounce/pause pause in selling.
- The SPX and IWM have paused, and we cannot rule out a bear market rally if the 200-week MA (3590-3600) holds on the SPX, and if $162-163 holds on IWM.
- Longer-Term, this is still a bear market until the S&P 500 and Russell 2000 can break above their respective 200-day MAs.
Mahindra EPC – A Proxy Play on MIS Opportunity
- Micro Irrigation firms > reeling under commodity stress > cut in Govt budgets > long wcap cycle
- Long term outlook, however is robust > revival in spends likely
- Negative sentiments > low earnings visibility > low valuation offers entry opportunity
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