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
The confirmation of a sideways volatile correction in indices has been established. The price movement in many stocks and indices clearly indicates that profit-booking is underway. While the fund flow may continue, there will likely be a shift from equity to debt and safe investments. Selling was witnessed in index-heavy stocks, and FIIs (Foreign Institutional Investors) have disposed of holdings more seriously than ever. Markets are slightly expensive, and a correction appears inevitable.
Technical
The correction has begun and been confirmed on the daily charts. Currently, the first target is 23,650, and there are strong chances that 23,050 to 22,900 levels could be seen in the coming 88 days. The rising volume in a falling market is the first sign that short sellers are slowly building positions, or hedging, which could add further pressure. The 2,000-point rise in the Nifty over just under two months (August 5th to September 27th) is significant, and a similarly aggressive correction phase is expected.
As the market rises, trailing stops come closer to the top, making it easier and safer for bulls. On the weekly charts, oscillators are indicating divergence, and monthly charts are reflecting extremely overbought conditions, something not seen for years. Shifting funds from equity to gold, silver, and short-term debt for a few weeks would be a simple way to preserve capital.
Time map
We have consistently mentioned the October 2nd eclipse in our earlier write-ups, which indicated that it would trigger economic crises in parts of the world, potentially leading to a major panic in global markets. The middle east conflict is escalating, with more countries getting involved. While war does not bring peace or settle issues, it often spurs economic and scientific innovations. Currently, the Sun is transiting Nakshatra Hasta, which offers investment opportunities, where patience plays a key role. Many investors may have realised that simply waiting would have led to better purchase prices in recent days.
The Sun will enter Nakshatra Chitra on the 10th and remain there until October 23rd. Gaps formed during the Chitra transit are insightful, and analysts and fund managers can form a strong investment strategy around it. Markets may be bearish from the 10th, with BFSI being the only sector showing positivity. Other sectors of interest are MNC companies and selective PSE (Public Sector Enterprises) companies. In the next 45 days, volatility and corrections could provide excellent investment opportunities, so maintaining cash reserves is advisable. IT and banking will hold the Nifty steady, while broader markets will see profit booking and selling pressure.
High-risk zone
Between October 12th to 15th, a high-risk period is indicated, with the potential for destruction or loss of human lives. A nuclear accident or significant destruction is possible.
Astrological indicators
Mercury 120 Jupiter: positive for communications and metal sector stocks, especially precious metals, which will witness lots of activity. Venus 120 Mars: positive for cash-rich companies.
Daily market outlook:
October 7, 2024: Monday – S.4-9.47/S.5: Anuradha: very high volumes
The opening 45 minutes may give confusing signals. Tithi 4 is bearish and extremely deceptive, so ideally, be active in the markets after 10:45 AM. A large movement in indices is likely, so avoid random trades with nearby stop-losses. Trend-following indicators will give the best results. Metals and private banks are good for BTST (Buy Today, Sell Tomorrow). Fertiliser and natural gas companies will attract operator attention.
October 8, 2024: Tuesday – S.5-11.19/S.6: Jyestha: bullish
A higher opening is expected. Volatile price movement may trouble jobbers and day traders. Mean reversion indicators will provide the best results. Metals and high-beta counters are likely to offer the best positional trades. BTST in the auto and cement sectors is highly recommended. MNC engineering and pharma companies will be in the spotlight.
October 9, 2024: Wednesday – S.6-12.15/S.7: Moola: bullish
A higher opening of indices is expected. It is likely the best day of the week for bulls. Large movements in technology and cement stocks are expected, and stocks trading 4 percent or higher should be followed for intraday profits. The shipping and defence sectors will be in focus. STBT (Sell Today, Buy Tomorrow) is indicated.
October 10, 2024: Thursday – S.7-12.32/S.8: P. Shadha: good till 1:00 pm
A sell-and-buy strategy will work well for day traders. Selling indicators will give better signals and results for traders. After lunch, the market sentiment is likely to shift, and sudden price spikes or reversals cannot be ruled out. Reversal signals should not be ignored. STBT is indicated, but positions should be squared off before noon.
October 11, 2024: Friday – S.8-12.07/S.9: U. Shadha: volatile, bullish
Contrarian strategies will yield the best results. It is an auspicious day for investments. Momentum breakout signals should be aggressively traded, making it the best day of the week to make quick profits. Pattern failures, though slightly harder to identify, have great potential for profits. We recommend investing in selective companies with a 4-month to 2-year perspective.
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!
