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: In the last week, market breadth was really positive. Mid and small cap stocks attracted huge inflow of funds, realty, consumer durables and Consumption took the lead, and on the last day of the week, the defence sector again hogged the limelight. The negative sentiment towards IT is clearly visible, and private banks have not been able to generate the interest of large players. The activity in the market is getting a bit reckless and people are of the opinion that if they keep investing, ultimately the markets will come up.
Nifty closed at an all-time high, many stocks showing a promising outlook.
Technical
Nifty closed at all-time high and it looks like we are very close to intermediate TOP, which could get formed in the euphoria of the budget to be presented in July. The momentum is showing 23,750, 24,300 and 24,810 as upside targets, euphoria and momentum has no resistance or supply zone.
The technical level of 22,530 looks like a strong level to watch for the reversal of sentiment. Breaking of 21,122 will give the first signs of trend reversal and below 20,680, it will get confirmed that the weekly trend has turned negative. The Bank Nifty, FMCG, Consumer Durable Index, metal and auto ancillary sectors are showing many positive signs. The real estate, PSE, MIDSMALL400, Midcap 150 Indices are showing extreme over-valuation.
The banking sector needs to be watched as Bank Nifty is getting ready for the up move in the coming few days, the sector has been lagging and now looks like getting ready to reward handsomely.
TimeMap – When the market cap indices Nifty 100, 200 & 500, Midcap, Smallcap index show 50:50 probability, it is time to be cautious, as risk reward and TimeMap favours a Bear camp for the next 15 days. A clear signal as per TimeMap making money is going to be most difficult. Capital goods and the auto sector are showing signs of intermediate top out pattern. A clear pre-budget exit rally is picking up. Midcap and select momentum stocks would continue the rally, the exuberance is showing up, looks like the super charge up is going to form a Bell curve pattern in a few weeks.
Venus-Mercury conjunction and their position from Neptune and Pluto will significantly add confidence to the Bear camp, as signs of a crack will become visible in the next 9 to 14 days. Quite a few bullish pattern failures will give a big opportunity for short sellers. For the next 15 to 20 days making money is not going to be easy, the market won’t reward the investors easily. You may get the right ideas, and catch the trend, but there could be external forces that would reduce the actual take home profits.
Also read: Dalal Street Week Ahead: India PMI, BoE meeting, FIIs mood among 10 key factors to watch
Weekly forecast We are expecting a negative close from last Friday (June 15) to this week Friday (June 21).
June 18, 2024: Tuesday: S.12: Swati: Auspicious Day – ETF SIP
Monthly SIP Day, ETF SIP. Lower opening of Indices and low volume trading is a positive sign for the markets. As indicated, best day of the week for SIP and position investments. Turnaround speciality chemical and logistics companies will see big investment flows. We are expecting a negative day. BTST suggested.
June 19, 2024: Wednesday: S.13: Vishakha: Volatile Day
Higher opening to the start the day. A slow and steady rising trend would be observed in the markets. Market sentiment would be extremely cautious. Post 11.20 am, retail participation would pick up, quite a few algos would get triggered in the 11.20 to 11.50 am time zone, and jump in volumes cannot be ruled out. Look for sell trades after 13.40.
June 20, 2024: Thursday: S.14: Anuradha: Speculative Day
Tithi and Nakshatra combination is good for speculative bets, medium term positions. Well informed investors will be more active. Natural resources, metals and the power sector hog the limelight. Selling in PSU banks and expensive stocks is expected. Market neutral Long Short Basket as overnight trade.
June 21, 2024: Friday: Purnima: Jyestha: Auspicious Day to Sell
Best day of the week to initiate position on short sell trade and also book profits. The sector leaders attract lot of institutional participation, DII should be sellers in overpriced stocks. Private banks and metal stocks would attract long term allocation from insurance companies. Watch the Midcap space - heavy profit booking cannot be ruled out in the space.
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.
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