There’s no stopping for markets!
Nifty continued to make new highs during the week to close at 13258.55 or up 2.23%. The broader Nifty 500 outperformed Nifty to close at an all-time high of 10978.85 or up 2.42% for the week.
The broader markets are outperforming and that’s a good sign!
Below is the log-scale monthly chart of NIFTY 500.
As you can see that the Nifty 500 had clearly broken out of almost 3-year consolidation and is likely to rise up to the levels of around 12000 or so.
But on a relative basis the party is just getting started!
As is clearly evident from the above chart that the Nifty 500 had grossly underperformed the Nifty 50 over the last 3 years.
Since the bottom in March 2020, the Nifty 500 has stopped underperforming on a relative basis and should outperform the Nifty over the next coming months!
If we deconstruct the Nifty 500, you’ll find that the top 10 stocks contribute almost 43% of the Nifty 500, which are obviously also part of the Nifty 50. The remaining 490 stocks control close to 57% of the Nifty 500.
Now, if only the top 10 stocks perform, Nifty 500 will never outperform Nifty 50 but that is not the case as is evident from the relative strength chart. The stocks beyond the top 10 have also started to perform well which will make Nifty 500 outperform Nifty 50 over the next couple of months!
So the real action is going to be in Nifty 500 stocks excluding the top 10!
Let’s see how that works out!
Our Hybrid Strategy Model Portfolio also performed in line with broader markets during the week!
Here’s the real-time snapshot of the actual 10 stock model portfolio established based on the DYR Hybrid Strategy. The Hybrid Strategy is the combination of Dual Momentum Monthly Rotational Strategy and Mean Reversion Long/Short strategies applied together.
Total portfolio equity at the end of the week stands at 17,98,541.19. The Hybrid Strategy Model portfolio is up 30.33% since 30/06/2020 on starting equity of Rs. 13,80,000.
Let’s see how the portfolio does towards the end of 2020.
Have a great weekend!