Stockology: Keep reducing exposure and move to low-beta companies

The long-term structure is very much intact, and nothing has changed. Weekly and monthly stops and levels are still same and there is no change. The sectors will change, textile, fertiliser and food business will attract lot of big-ticket investment.

For the Nifty, 23,960 was just the level to bounce back from, and  it did so in style. The bounce has already taken the benchmark index past 24,704, indicating underlying investor confidence. Interestingly, post Wednesday, the markets started the typical fading move historically observed  before a major sideways or corrective phase of a bull market.

Small and microcap counters have started a sudden upward movement, but the index remains in a tight range. The current position of the Nifty is favouring bearish operators, and nothing can stop them from getting aggressive in the coming few days. But they should act fast.

The downside target in the short term is 23,640, and 23,230 within 22 days. Short-term indicators are showing substantial risk, while the long-term structure is intact. The stop for the short-term bear trade would be the Nifty high of 25,100.

The long-term structure is very much intact, and nothing has changed. Weekly and monthly stops and levels are still the same. But having said that, textiles, fertilisers, and the food business will attract lot of big-ticket investment.

The sun entered its own nakshatra — magha — on August 16. It is a good phase for the indices, especially for the real economy — brick-and-mortar — stocks. When technical signals and the time map both turn negative, only then will a correction get triggered. With technical signals turning weak it looks like it’s time to hold  on to cash and increase the safe stocks in one’s portfolio. Venus 120 Uranus on August 27th is positive for power and high-value companies. Venus 120 Pluto on 29th is positive for companies with exceptionally large equity capital, and also insurance companies.

Our overall view is to keep reducing exposure, move to low-beta companies, and hold cash in hand as the markets are getting ready to offer a wonderful investment opportunity.

A lower opening is expected, and reduced trading volumes may widen the jobbing spread. While arbitrage desks could benefit, jobbers may find it challenging to participate in the market. Divergence indicators are likely to provide the most accurate signals. A gradual decline in stocks is possible, and a negative closing is anticipated. A buy today, sell tomorrow (BTST) strategy is advised.

A higher opening of indices is expected. Sentiment in the market would be overly cautious and due to the festive mood, participation would be lower than usual. The tithi suggests a rising trend in the first half while selling pressure mounts in the second half due to external news flows.

The tithi indicates a strong bullish momentum, and the nakshatra is particularly volatile, favouring those who make swift decisions and act quickly. Speed is crucial for success — participate aggressively and exit just as fast. High-beta stocks, or those with momentum, are likely to yield the best results, so active participation is essential. A short-term buy and sell (STBT) strategy is recommended. Certain technology and communication stocks are expected to attract buying interest.

A slightly higher opening combined with aggressive trading could lead to an upward movement in the first hour. The tithi is bearish, which has been consistently accurate in the past. The aardra nakshatra can produce significant movements in either direction, often influenced by the tithi. We are expecting a substantial decline today. While certain stocks may support the indices, the broader market is likely to experience heavy selling by large institutions. Power stocks could attract investment.

A decline and additional selling is anticipated in the markets. The tithi indicates that proactive trading will yield the best results, as many stocks are likely to fill gaps created at lower levels and enter a downtrend. The time map suggests that stocks which have recently bounced over the past 20 days are expected to once again reach lower levels.

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.