Below is a chart of Visaka Industries Ltd. from 2003 to 2021 reflecting the year-over-year (YoY) percentage change.
We are going to review the periods when Visaka Industries was at the same level in year over year performance (red arrows) based on the closing price of July 22, 2021 and see what we can determined about where the price might go from current levels. Continue reading
Posted in Visaka Industries Ltd., YoY
Below are the projections for Tata Motors based on the technical price change on a Year-over-Year (YoY) basis.
Year-over-Year Review
In the latest run up for Tata Motors, from the March 2020 low, the price of the shares have increased as much as +368% before peaking on a YoY basis. This does not mean that the shares have run out of momentum to the upside. Instead, it only means that the pace is not going to be as quick in the last year.
In the last comparable YoY period, from the February 17, 2009 low to the March 17, 2010 peak, Tata Motors increased approximately +499%. After March 17, 2010, Tata Motors rate of increase declined. This means that the share price continued to move higher just not at the same parabolic rate (green dashed line) as seen in the February 2009 to March 2010 period.
Ultimately, as the share price got to the peak, around December 10, 2010, the average rate of increase, although positive, was being brought lower and finally to a negative YoY level (red box). This resulted in a decline of nearly -50% in Tata Motors from December 2010 to August 2011.
If the current run is comparable to the 2009-2010 run, then we could see a new high at approximately 511-600. A decline in the YoY rate below +100% would mean that the shares have peaked and are in for a -30% to -50% decline from the new established peak in the stock price.
Posted in Tata Motors, YoY
Review:
On June 11, 2020, we said the following of Consumer Sentiment:
“The rapidity of the stock market decline and recovery and failure to achieve new highs suggests that the Dow Jones Industrial Average, as a sentiment indicator, will retest the prior low (-15.47%) opening up for testing of past graveyard levels.”
Our assessment was wrong as we did not appreciate the fact that there have been few double dips in YoY data on the Dow Jones Industrial Average (only four since 1896).
Outlook:
Below is the data from 1986 to the present for the Consumer Sentiment Survey and the Dow Jones Industrial Average on a year over year basis.
While we have run up against what appears to be the limits of year-over-year gains for the Dow Jones Industrial Average since 1986, there has been eight other occurrence of above 50% y-o-y gains since 1896.
It is possible that the stock market could experience a similar decline of y-o-y increases, as seen from the 1997 peak, where the market moves higher but was unable to exceed the y-o-y gain top of 1997. This resulted in the DJIA going from 8,222 in 1997 to 11,497 in 2000. Likewise, the peak of y-o-y gains in 2010 saw the DJIA increase from 10,325 to 16,516 by 2016 or 21,917 by March 2020.
The University of Michigan Consumer Sentiment indicator has provided little in the way of indicating peaks in the market unless it was in positive year over year territory. Currently, we’re at a distinctly negative level in the Consumer Sentiment indication with only two other periods (2008 & 1991) registering worse levels.
Essentially, consumer sentiment could get worse but not by very much and not for too long of a period in time before a recovery will ensue. Our general view is that a recovery to positive levels in y-o-y changes in the Consumer sentiment level is necessary before the next protracted decline can materialize.
Posted in Consumer Sentiment, Dow Theory, YoY
Below is a chart of Northwest Natural Holdings (NWN) from 1973 to 2021 reflecting the year-over-year (YoY) percentage change.
Below is a chart of the iShares 20+ Year Treasury Bond ETF (TLT) from 2003 to 2021 reflecting the year-over-year (YoY) percentage change.
Below is a chart of Telia Co. AB from 2001 to 2021 reflecting the year-over-year (YoY) percentage change. This assessment reviews the probability of performance in the coming year(s).
We have received questions about the US Dollar index and while we are not specialists in the Forex market, the tools we used to assess equity markets, to a certain degree, could be leveraged on this topic.
There's a high probability that unlimited amounts of money printing will lead to weaker currencies and we are seeing assets moved away from the US Dollar to other alternatives such as equities, real estate, precious metal, and even crypto currencies.
The US Dollar peaked in March 2020 at 103 but has fallen -13% since then. Double digit fluctuations in currencies is substantial and should be examined.
To see how far this downward trend can go, we have utilized the Year-Over-Year model (YoY) and reviewed the past for reference.
The chart below shows the year-over-year percentage change of the US Dollar Index, in this case we use DX-Y from Yahoo Finance. We can see that average change is virtually flat at 0%.
Applying +/-1 standard deviation range to establish a trading range of +/- 10%. Currently the index is at -9% for the year and approaching a bottom of the boundary. Given that the Federal Reserve has no intention to stop printing money in the near term, we forecast that this index could reach -15% before any reversal to the declining trend.
As a reference point, we can look back at the financial crisis time frame when the index registered a triple bottom between 2008-2011.
It can be argued that we are in a similar environment where the Fed must print their way out. A near-term bottom could be in place but a risk of double or triple bottom is possible based on the precedence.
We're not as worried about the decline to a new low as much as we are concerned about a sudden rise to the upside.
Below is a chart of Accelya Solutions from 2001 to 2021 reflecting the year-over-year (YoY) percentage change. This assessment reviews the probability of performance in the coming year(s).
Posted in Accelya Solutions, YoY
On September 6, 2020 in an article titled “The Nasdaq Will Surprise Everyone”, we said the following:
“When compared to the Dow Jones Industrial Average at the same price levels from 2009 to 2012, the Nasdaq Composite needs to correct but there is more room to run.”
Since that time, the Nasdaq Composite declined -11.80% from the September 2, 2020 high.
So far, the Nasdaq Composite has not exceeded the September 2, 2020 year-over-year runup. If you thought that the Nasdaq Composite run has been exceptional since the March 23, 2020 low then the chart below should put those thoughts to rest.
Posted in Nasdaq Composite, review, YoY
Below is a chart of the 10-Year Treasury from 1963 to 2021 reflecting the year-over-year (YoY) percentage change.
Below is a chart of Intel Corp. (INTC) from 1981 to 2020 reflecting the year-over-year (YoY) percentage change.
Below is a chart of HDFC Bank Limited from 2001 to 2020 reflecting the year-over-year (YoY) percentage change. This assessment reviews the probability of performance in the coming year(s).
Below is a chart of ICICI Bank Limited from 2001 to 2020 reflecting the year-over-year (YoY) percentage change. This assessment reviews the probability of performance in the coming year(s).
Below is a chart of ITC Limited (ITC.BO) from 1992 to 2020 reflecting the year-over-year (YoY) percentage change. This assessment reviews the probability of performance in the coming year(s).
Below is a chart of Imperial Brands (IMBBY) from 1999 to 2020 reflecting the year-over-year (YoY) percentage change.