MC EXCLUSIVE 'Don’t chase the euphoria — but get ready for new highs': Sushil Kedia on what comes next for markets

Don’t chase excitement. Don’t panic on dips. Buy patiently, says Kedia.

• Investors advised to wait for pullbacks after euphoric market gap-up
• India-US trade deal boosts market confidence and export outlook
• Quality stocks in textiles, chemicals, and consumption seen as strong picks

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As Indian markets brace for a euphoric opening following the India-US trade breakthrough, investors may be torn between fear of missing out and caution after weeks of volatility. In a late-night interaction, Sushil Kedia, founder of Kedianomics, explains why investors should avoid chasing gap-up moves, how the recent market “reset” has cleared positioning excesses, and why he sees the groundwork being laid for new index highs in the coming weeks and months.

Q: Markets are opening with a big gap-up. What should investors do on such a day of excitement?

This is such a unique night. Past midnight, you are working, I am working, India is working. That level of excitement itself tells you how extraordinary this moment is.

But tomorrow is a day to be cautious. When markets open with such a big gap, I will ask my clients to wait for pullbacks. Even if we miss some upside, that’s fine. Excitement never gets rewarded. Discipline does.

Q: Your medium-term view?

At the risk of being ridiculed or getting churlish looks, our conviction has been that India needs markets at much higher levels — Nifty 27,600, then 29,600 and eventually 32,600. Now the charts are firing in that direction.

What we saw around the Budget and after that was nothing short of violence. A 1,000-point fall in minutes, followed by a 1,000-point rebound from the bottom. That kind of price action wipes out positioning on both sides.

This has completely reset the market.

After a massive flood, the land looks devastated, but the soil becomes fertile. That’s what has happened here. Bullishness, bearishness, leverage, overconfidence — everything has been washed out. Sentiment, business confidence and positioning are all at absolute bottoms. From here, when things start firing together, new highs become a very realistic outcome.

Q: If the outlook is so strong, why not buy aggressively tomorrow?

Because common sense still applies. If everyone is buying after a big gap-up, trading can only happen if someone is selling. And it’s never weak hands that sell into strength — it’s strong hands.

We did not want to participate in the pessimism at the bottom, and we also don’t want to participate in the first few minutes of euphoria. After the excitement fades, you will usually get 300–500 point pullbacks. That’s where smart entries come.

Q: Which sectors or stocks could lead this rebound?

Frankly, almost the entire market becomes an opportunity after such a reset.

The only spaces I would still be careful about are PSU banks, which have gone through a full cycle top, and metals, which remain hostage to global conditions.

Beyond that, people will hardly make mistakes buying quality stocks. You will find multi-baggers in textiles, select chemicals, data centre stocks and many domestic consumption names.

Even relatively ignored stocks can surprise. Take GlaxoSmithKline — we took a position there, and I wouldn’t be surprised to see 50% upside in a few months. Berger, Asian Paints, Hindustan Unilever, Colgate — domestic consumption stories are lining up again.

Just don’t rush. Buy at your own pace.

Q: What levels should investors track now?

This is now a “buy on dips” market. I will not tolerate a dip below 25,100 on Nifty. That’s my trailing stop loss for the broader market. If we go below that, I will reassess. If we open at 25,600 or 25,700, I will wait for sensible pullbacks to build positions. Individual stocks should be bought on breakouts and strength confirmations.

Q: How important is the India-US trade deal in this turnaround?

It’s extremely important. We were worried about the US trade situation — and now look at the bounty. We also have a strong EU deal. Combined, India now has constructive trade arrangements with two major global blocs.

In one sense, India has become the beauty queen of the global economy.

Export confidence is reset. Business confidence is reset. Earnings expectations are reset. Even the currency narrative is resetting.

Q: You were bullish on the rupee even when sentiment was negative. What’s changed now?

Fear suspends common sense. The rupee weakened because exporters needed breathing room and because of trade uncertainty. RBI allowed that adjustment. Now, with trade clarity, expectations of current account stress will fade quickly.

Those who shorted India — in currency and equities — will realise that betting against this economy is not easy.

Q: Final message to investors?

This is a fresh playing field. Markets have reset. Confidence has reset. Exports, earnings and sentiment are lining up again.

Don’t chase excitement. Don’t panic on dips. Buy patiently. These are brilliant times ahead.