Check your pockets

There are pockets in equities markets where stocks are making ‘rare’ and extremes moves.

Often these downdrafts coincide with ‘weaker hands’ throwing away their shares (at the wrong time) which is also when price declines are exacerbated by machines and money managers playing a short game of protecting their bonuses.

The example below, shows ANZ Bank (ANZ.ASX) and Wesfarmers (WES.ASX) both trading to 3 standard deviations and reaching Oversold levels on a Weekly basis.

Over many years, this simultaneous event doesn’t happen too often.

At these moments, it has been my experience when professional investors look to accumulate rather than sell.

In other words, observe where the pendulum’s arc is.

I’m expecting a rotation of monies into such opportunities and occurrences.

June 14, 2022

by Rob Zdravevski

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