Stockology: Bearish week ahead; momentum indicators, quick thinking and execution to be rewarded

Of the new age online consumer tech companies like Zomato, Paytm, Nyka, Justdial etc, one of two such companies will give huge positive surprise to the markets.

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 – The movement of Nifty was expected, and it happened. Everybody was prepared for the volatility. The best was assurance of the TIMEMAP, that whatever be the levels of 4th & 5th – they will come back within 13 to 15 days. This clarity reduces the anxiety of what to do with the positions. Leveraged positions need 20% minimum buffer for MTM, and cash is king, Just keep something to add in case markets tank. As mentioned in technical and TimeMap section – Our FMCG ETF call went really well.

We anticipated government may not get the majority and still presented the bullish week view.

Technical – No change in the last week write up. Technically on the 4th, Nifty broke the low of the last 5 months, and then bounced back. It has disturbed many charts as most PSU stocks were negative 10 to 25 percent zone.  After scaling new high, Indices gave a nice correction, and 21,281 was marked.  Mentioned in the last week, 22,226 is critical level. Indices should not trade below level for more than 2 days. The exit stop is at 21,800 – even a spike below should be considered sign of a weakness. Obviously with election results on June 4th Volatility would be very high, and utmost care should be taken. On the upside, 23,460 remains the best target, and next is 23,960.

Bearish week ahead. June 10th onwards Large Cap high beta Index heavy stocks are showing positive movement. The big 3 communication sector leaders will see big flows. SUN will move in Nakshatra Mrugga, which is best for momentum indicators, and quick thinking and execution gets rewarded. Algo and Systematic trading firms will do very well during this zone. Surprise in logistic sector including shipping as a sector, bus manufacturers. Participants who have POINT of FORTUNE in Gemini – follow discipline and process lot of money can be made.

Also read: Dalal Street Week Ahead: New govt, CPI, IIP, FOMC meet among 10 things that will keep traders on toes

Of the new age online consumer tech companies like Zomato, Paytm, Nyka, Justdial etc, one of two such companies will give huge positive surprise to the markets. Many Specialities chemical companies will confirm the bottom out patterns. Range of movement on both side is 3 percent indicated, and the bias is more towards negative close.

Week ahead

No SIP or ETF investment recommended during the week.

June 10, 2024: Monday: S.4: Pushya: Volatile Bearish

The Tithi is most deceptive and misguiding. It is tough to read screen or intraday signals and failure of judgement is highest, so participate only through pre-defined trades.  Post 14.05, investment is recommended. SELL and BUY strategy would be very rewarding. Selective stocks showing positive, Auto & communication. BTST in metal and especially in Steel sector.

June 11, 2024: Tuesday: S.5: Ashlesha: Auspicious Day

Tith gives best momentum and Nakshatra gives the best breakout – the finest combination for major directional movement – consolidation breakout. Use the daily and weekly signals, aggressively participate.

Trend following systems can make lot of money. BTST Cement and Auto stocks is recommended.

June 12, 2024: Wednesday: S.6: Magha: Bullish

Slightly higher opening is expected. Cement and Engineering companies attract fund flows, followed by the Auto. We are expecting Buy and Sell would be better for the investors. Oversold reversal or mean reversion system will give better results. Nakshatra Magha is one of the top 5 bullish Nakshatra. Volatility and volumes would drop significantly. It could be boring day.

June 13, 2024: Thursday: S.7: Purva: Very Volatile Day

Wide trended move is expected today. Tithi often gives bullish move, Nakshatra is good for selling, trend following strategy will pay off very well. Pattern failure, that after giving BUY signals breaking the bottom, is like a trap, try to identify such trades as big money can be made within short span of time. The activity would be restricted to select few rests of the market would be extremely tight and range bound.

Time to watch during the day is 13.50 to 14.15 is the reversal signal zone. Divergence signal STBT recommended.

June 14, 2024: Friday: S.8: Uttara: Good after 11.

Tithi gives reversal trades; contrarian anticipatory trades can give wonderful trading profits. Mean reversion short term indicator on the hourly charts, will be really good, divergence position STBT for 13 days can be initiated, after 11.45. SUN 0 MERCURY, Market breadth will be negative. Profit booking and reducing exposure is highly recommended.

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