Stockology: Banking is showing positive signs and looks ready to lead the next bullish rise

Positive stocks will yield better returns, and even if there is a decline, it would be nominal, not significant.

Stockology is a weekly column by futurologist Mahesh Gowande. He is the Founder and Director of Ayan Analytics, which has developed ZodiacAnalyst, a research software with time and price charting tools.

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Review of the Last Week:
There was a gap-up opening followed by a range-bound move for another two days, then a gap-filling day, which incidentally turned out to be an auspicious day, and Friday was a lackluster day. Even though it was a monthly close, nothing significant happened in any stock or counter. PSUs, as expected, gave a nice bounce after remaining in the oversold zone for a few days, and defense hogged some limelight. Interestingly, the Adani saga continues with surprises, and all the stocks are now in the upper circuit or showing big gains in the last three days.

Banking is showing positive signs and looks ready to lead the next bullish rise.

Technical:
While technically, the bounce during the week was nowhere close to what we saw before September close, whenever markets had fallen, the bounce was stronger than the previous rally. Since October 1st, there has been hardly any bounce, and after every fall, the bounce is getting weaker. The only good part is that some sectors are taking the lead, providing exit opportunities. The sector rotation during the bounce is indicating a clear signal that markets will hit new lows very soon, possibly below 23,000 and targeting 22,700 or lower.

The bearish view will be reviewed or reassessed if the Nifty moves above 25,640 within 26 days from last Friday. On a shorter timeframe, Nifty trading above 24,540 will give the first signs of recovery, and the rise needs to be secular. FMCG is showing signs of bottoming out and recovery from the current levels.

TimeMap:
Historically, the month of December has been powerful and positive for the markets. Especially when the Sun enters Nakshatra Moola—the most bullish of all the Nakshatras—almost more than 30 index stocks show a positive trend, with 10 in the neutral zone. From December 2, the Sun will transit into Nakshatra Jyeshta, known as the most ambitious of all signs. It represents steam, hydro energy, crude oil, and the natural resource and mining industries.

Based on the positions of the Sun, Moon and Venus, the week ahead is overall positive for the markets. Positive stocks will yield better returns, and even if there is a decline, it would be nominal, not significant. The sectors that are very positive include fertilisers and related chemicals, hotel stocks, and the steel industry. As mentioned above, Nakshatra Jyeshta is positive for mining and natural resource sectors.

We believe a big positive move in select one or two technology stocks could surprise and even turn indicators positive for the Tech Index. Cement, as always, will give stable returns and perform best from a 45-day perspective.

December 02, 2024: Monday: S.1: Jyeshta: Good to Sell
A flat-to-negative opening of indices is expected. Sentiment will be low, and most participants will wait for the markets to provide insights. It is a good day to look for short-sell trades. Overbought indicators suggest a large number of stocks are ready to fall, and one should look for such opportunities.

STBT (Sell today buy tomorrow) is indicated to be covered before 11 AM on Tuesday. BTST (Buy today sell tomorrow) in Cement and Auto.

December 03, 2024: Tuesday: S.2: Moola: Bullish Day
A flat-to-negative opening will be followed by institutional buying, mainly in the capital goods and services sectors. The recovery in stocks will lift market sentiment. Day traders can aggressively look to buy stocks given reversal confirmation on charts. Cement, auto, and many real-economy engineering stocks will attract significant investment from long-term investors. Big institutional inflows are expected in many counters, lifting indices significantly. BTST is indicated.

December 04, 2024: Wednesday: S.3: P. Shadha: Bullish Day
Tithi 3rd, as previously mentioned, generally gives wide moves and a strong closing on indices. The best approach is to focus on stocks with a higher opening—if they sustain the first 45 minutes, expect them to remain in the same direction until the end of the day, and vice versa for shorts.

Big money can be made today by disciplined trend-followers using 30-minute charts. Do not anticipate exits or entries prematurely. Use a long-short basket for tomorrow as an overnight trade, especially by leveraging divergence indicators for stock selection.

December 05, 2024: Thursday: S.4: U. Shadha: Volatile DayTithi 4th is the most deceptive, making decision-making tough. Signals on charts may misguide or be observed incorrectly. Combined with the Nakshatra of the Sun, known for its adamant nature, it becomes a high-risk day for those unwilling to use stop-losses.

Participate only if you can set stops before entering trades. Divergence indicators give the best trades, and even a contrarian approach could yield significant gains. Masses tend to lose big on this day. No overnight trades are suggested. The best strategy would be a long-short basket.

December 06, 2024: Friday: S.5: Shravan: Money-Minting Day
Those with access to information and the skill to act on it can mint money today. Aggression and the ability to participate in momentum are key. Tithi 5 generates spikes on charts, which will act as strong reference points in the future.

We expect a positive weekly closing, ideally crossing last week’s high. Nakshatra Shravan offers ample market information—the challenge is executing transactions effectively based on that information.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.