WELCORP - A case study in smart money accumulation

Hypothesis:
Historically, metal stocks have shown strong rallies following interest rate cuts. This is based on the premise that lower rates stimulate economic activity, driving demand for industrial metals and commodities. With the potential for a rate-cut cycle on the horizon, this creates an actionable setup for accumulation before a broader uptrend unfolds.

Strategy: “Accumulate the Red”

We propose an accumulation strategy tailored for this macro setup:

• Accumulate 5–10% of your intended position on every red daily candle where the stock declines by more than 1%.
  

• This allows for scaling into weakness, which historically has provided the best reward-to-risk entry points in these cyclical turnarounds.
  

Why This Works

1. Macro Tailwinds: Once interest rates peak, the cost of capital drops, benefiting infrastructure and industrial sectors.
   
2. Sentiment Mismatch: Market tends to remain overly bearish during the initial leg of a pivot, creating undervaluation.
   
3. Risk Management: Accumulating on red candles avoids chasing momentum and distributes entry risk.