GLOBAL MANAGEMENT

APOLLO PHASE III

TRAINING COURSEWARE
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Contents:

1 、 Financial Perspective

2 、 Quality Stock Analysis

3 、 Trading System

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Financial Perspective

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Focus on U.S Stock

• Stocks edge higher to close out a strong quarter: Equities closed slightly
higher, sending the S&P 500 to a fresh record high and its best first-quarter
gain in five years.
• Labor market remains in good shape: This week's report on initial jobless
claims showed that new claims fell to 210,000, the second-lowest reading
since early January.

• Markets looking to new inflation data: While the consumer price index (CPI)
gets most of the headlines, the Fed's preferred measure of inflation is the
personal consumption expenditures (PCE) reading, which is due out on
Friday.

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Learning is the best investment

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Domestic News-India
• India's Ministry of Commerce and Industry announced that India's eight core
industries grew by 6.7% in February on March 28.

• The growth of India's eight key industry - coal, crude oil, steel, cement,
power, fertilizers, refined products and natural gas - was revised to 4.1% in
January. It was 7.4% In February 2023.

• These industries 's output growth rate slowed to 7.7 % in April - January at
this fiscal as per 8.2 % in April-February 2022-23.
• The growth rate of fertilizer production is in the negative range. The eight
core industries contributed 40.27% to the national industrial production index
(IIP).
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Market Summary For The Week.

• The small and mid-cap index comprehensively beat the front-line index in
FY2024, with returns more than double that of the Nifty 50 index.

• The large-cap stocks’ bull trend remains intact even though the investors are
concerns the 2024 election.

• Nifty Realty index was the biggest winner in FY24 as it delivered triple-digit
returns (131%). Others included Nifty India Defence, Nifty PSE, Nifty CPSE
and Nifty PSU Bank index.

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Outlook for next week

• The Nifty index rebounded sharply to cross the 22,500-mark after sustaining
momentum above 22,100 points.
• Additionally, the daily stock breakout indicates rising optimism.
• However, the Nifty index encountered the resistance near its previous swing high of
22,526 points. Therefore, to maintain a sustained rise, it must break through 22,525
points. The 22,200 points can serve as short-term support at a downward trend.
• Markets will have a wild swings as benchmark index valuations are in expensive
territory 。
• But the market remains bullish, and investors are willing to bet on equity assets in the
next fiscal year.
• Our focus will shift to full-year earnings from next month, but banks and IT companies
will be the focus going forward.
• Each correction provides investors with an opportunity to revisit small and mid-cap
stocks, but large-cap stocks will attract more attention going forward.
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Learning is the best investment

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The Stock Sectors and Stock weights in the Economic Cycle

• The economic cycle includes four stages: recession, depression, recovery and peak.
• Generally speaking, during a recession the stock market falls; and the stock market hit
bottom in depression.
• When the economic recovery begins, the stock market will gradually rise; when
Economic peak arrives, the stock market will rise to the highest price level.

• When investors buy a stock, they always considers in many ways.

• But we have to admit that some external factors are beyond our control.
• Next we will discuss the impact of economic cycles on stocks.
• Please noted that various types of stocks will perform differently at different stages of
the economic cycle.
• Fortunately, we can learn from history.
• To achieve your financial goals, you should prepare, adjust and diversify your
portfolio based on economic cycles.
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Stock Market is closely related to The Four stages of the economic

cycle
• The different stocks respond differently to the same economic cycle. If you could the right stocks
during a given cycle , it will lead to higher returns.
• The defensive sector (non-cyclical sector): It means that its operation and performance
fluctuations are not affected by macroeconomic fluctuations.
• The cyclical sector: In contrast to defensive stocks, cyclical stocks are characterized by a strong
correlation with economic fluctuations.
• The Technology sector: It is highly sensitive to market cycles, because the technology stock
valuations are largely based on earnings forecasts.

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The long-term trends of different stock sectors are related to the

economic cycle.
Interest rate sensitivity
• Interest rates determine the cost of borrowing money. Borrowing costs influence the level of
consumer spending and the level of corporate capital spending.

Stock valuation
• Classic stock valuation models are based on a company's future earnings forecasts. During an
economic slowdown, Earnings expectations will be revised downwards.
Dividends
• Dividends paid to investors are come from the company's profits. Depend on the rise or the fall of
overall economic activity levels , the size of a company's profits and dividend payments will
change.
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Quality Stock Analysis

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First Gap Up day: 20%
Second Gap Up day: 20%
Third Gap Up Day: 20%
Fourth Gap Up Day: 10%
Fifth Gap Up Day: 10%

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Another 10 consecutive
gap-up trading days!

10 consecutive gap-up
trading days!

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WOW!!!!
>50 consecutive gap-up trading days!
>return of 1600%

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Trading System

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How to identify the Morning Star pattern:

• The trend of the morning star means the end of
the downtrend and the market begins to rebound,
• The first line must be a red candle to continue
the previous trend, the second candle must be
indecision comparably, and the third line must be
a green candle.
• It shows the rising market has begun, and the
color of the middle one is not important

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How to identify the Morning Star pattern:

Technically, the second candle of the morning star

should be a gap and open low. This kind of morning
star is the most standard and provides the strongest
bottoming signal, and the rising market in the future
may last longer.

However, the market is dominated by major

institutions, hedge funds, mutual funds and so and
there will be many changes in forms. As shown in the
picture, it doesn’t matter whether there is a Doji in
the middle, or small green/red candle, or a group of
different candles. We can treat them all as Morning
Star
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Requirements of the Morning Star Pattern:

1. Appears after a downward trend or short-term correction!

2. The middle can be a Doji or a small green /red candle, or a group of different
candles.

3. The third big green candle can Gap Up or not. If it Gap Up, it means that the
reversal pattern of morning star is stronger.

4. The closing price of the third green body should reaching at least ½ into the body of
the first day red candle!

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Learning is the best investment

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The “Double Spinning Bottoms Candlestick Patterns

This is one of the more common bottom reversal patterns in
candle charts. It is actually a fission from single-pin bottoming.
It is a deformation of single-pin bottoming. As a special single-
pin bottoming combination pattern, the natural effect is often
more powerful than single-pin.

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The performance of "Double Spinning Bottoms Candlestick Patterns"

• It consists of two candles with lower shadows.

• It often occurs after the stock price has fallen continuously, and there is strong
support below.

• Once it appears, it often means that the downward trend may be about to end, and
the bottom is basically confirmed.

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The Evening Star Pattern Formation:

• The Evening Star is a candlestick pattern and can be considered as
reversal of the Morning Star pattern.
• Therefore, the position of the Evening Star in the candlestick pattern is
completely different from the Morning Star pattern.
• It is a reversal signal in a stronger uptrend. If it appears in an upward
trend, you should pay attention on the clear reversal signal or a short- to
medium-term pull back.
• And it may be a very good time to sell and avoid in the short and medium
term.

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The large Bearish Candle with Massive volume

After the stock price has experienced a range of rising, it suddenly falls sharply and form a large bearish
candlestick. At the same time, the trading volume increases raptly. It indicates a strong selling pressure
and traders are dumping the stocks. Get out from it NOW!

Please note that when using this technique:

(1) This pattern is in the middle or late stage of the upward trend, the rising time are more than 15
trading days, and the amplitude of the previous uptrend is not less than 30%;

(2) The trading volume is enlarged, which is twice or more than the average trading volume of the
previous period;

(3) This bearish candle must be very large in size, with it’s real body’s price range to be at least 5% of
its current price, or above.

(4) The combination of the big red candle and the previous candles forms a topping or covering pattern.

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Bearish Candle with Massive volume

The beginning of a plunge
Bearish Candle with Massive volume
Uptrend comes to an end

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How should we know if "Bearish Candle with Massive volume" is a

wash?
Three references :
• The first reference is the previous trend moving amplitude. In the chart, the stock
rises from the lowest point, this range is not too big. Also the price broke above
previous resistance level, it shows bullish sentiment in the stock.

• The second reference is the moving averages. When bearish candle occurs, the
moving average are still intact. Moving average is still in a long-term divergence
form.

• The third reference standard is the candlestick chart. The closing price of this big
red candle is higher than the closing price of the previous day, which is a false
signal.
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THANK YOU
Learning is the best investment

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