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.
Review
As expected, a weak Venus has triggered wealth destruction, marking the fourth consecutive week of negative closing. Last week, the fall was steep in many frontline stocks, which hurt market sentiment, and the "buy on dip" strategy that had been prevalent over the past two months is finally showing signs of fatigue. The majority of retail investors, funds, and HNIs are nearing the exhaustion of their earmarked funds, and, more importantly, confidence has been shaken as a few stocks have declined well below expectations.
The first talks of a bear market have begun, and swing traders & investors new to the markets are unsettled, as most have not experienced prolonged, sideways, sluggish markets since 2020.
Technical
Last week, markets tried to hold Nifty levels on the 23rd and 24th, but as pressure mounted on the last day, Nifty declined by more than 300 points to recover and close around 24,180. The short-term level of 23,970 seems a likely point where short covering could emerge, joined by oversold mean reversion trading strategies. This could give a false signal for swing traders to become aggressive; we highly recommend not initiating fresh buying but holding for confirmation. Exiting trapped positions would provide a better edge in the coming weeks. Internal and external factors suggest that markets have entered a long, sideways declining trend, which will require time to address the gaps left in the past six months.
Consolidation and strengthening are needed, as making money in the markets is challenging and demands years of practice, consistency, and emotional stability. While buying the dip was effective for some weeks, selling the rise should be considered the new normal trading strategy. Stock volatility has increased significantly, while Nifty remains relatively stable, but we anticipate wider movements going forward. After a small additional decline, a gradual bounce of 2% to 3.5% on indices over the next 15 days is expected.
Also read: Relentless FII selling, earnings setbacks and more: Factors behind the selloff on Dalal Street
TimeMap
On the 24th, the Sun entered the Nakshatra Swati.
Swati Nakshatra is the most favorable for investment among all 27 Nakshatras; the period from October 23rd to November 6th is ideal for making significant business decisions. During this time, markets offer ample opportunities to invest at lower levels. Remember that "auspicious" means markets will decline and provide buyers with opportunities at lower prices. It’s not necessary to buy in full quantity right away—identify the right counters, accumulate, and gradually increase exposures. Swati tends to give 14 to 21 percent returns within a year. TimeMap is still negative on indices, but FMCG and PSU sector stocks are likely to see strong support and buying, with banks, especially index-heavy ones, performing exceptionally well.
The 28th seems to be an important day. Venus at 90 degrees with Saturn could positively influence large-cap stocks, especially in the PSU sector. Mars at 120 degrees with Neptune favours technology and new-age tech companies. Mercury at 120 degrees with Neptune on the 1st will positively impact the metal and engineering sectors. Broadly, while sentiment in the markets will face further challenges, we anticipate a recovery from Wednesday to Friday in the coming week. Invest in oversold stocks for the long term, from 12 months to 48 months.
October 28, 2024: Monday: K.11-7.51/K.12: Purva: Good Day
A slightly higher opening of indices is expected. The Tithi is bullish and may give a positive movement in the markets; a sell-off before 11:00 will confirm that post-lunch markets will turn positive and rise. Proactive action will be rewarded—plan your trade and execute it with clarity before lunch, as many will try to join in the second half. BTST (Buy Today Sell Tomorrow) is recommended.
October 29, 2024: Tuesday: K.12-10.32/K.13: Uttara: SELL Day
A higher opening is expected, with positive sentiment and increased volumes due to sudden participation from day traders. We suggest using divergence indicators, which will yield the best results today; contrarian strategies will be highly rewarding. Tithi 13 often brings an unexpected drop in many stocks, especially after lunch; STBT (Sell Today Buy Tomorrow) is advised.
October 30, 2024: Wednesday: K.13-13.16: Hasta: Bad Day
A flat to negative opening is possible, with neutral sentiment. Most participants may be uncertain about market direction. Intraday slow and steady selling pressure will likely keep pushing prices down, leading bullish day traders to incur losses. Prices will continue drifting downwards, so those who wish to invest should proceed slowly and avoid chasing prices, as the market will provide enough opportunities. For overnight trades, oversold or overbought indicators will yield better BTST trades.
October 31, 2024: Thursday: K.14: Chitra: Best Investment
The Nakshatra Chitra is favorable for gap-up trades. Remember to follow the direction of the gap, as it often fills before resuming the trend. Positive movement is anticipated, particularly if the market closed negatively on Wednesday. Buy and sell strategies are expected to be rewarding. BTST is recommended in mid cap and small-cap stocks.
November 1, 2024: Friday: Amavasya: Swati: Investment Day
Following last week’s negative close on Navami, a positive close is anticipated on Amavasya. Midcap and small-cap stocks will see significant buying and price adjustments by strong investors. Pharma and auto sectors are likely to perform well. STBT is highly recommended in IT and FMCG, while BTST is favored in healthcare, PSU, and retail businesses.
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.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
