Stockology: No need to rush in or panic exit markets

The moment in the markets was in line with our expectations.

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.

Read previous columns here

Review of the Last week

After 2023, for the first time, 3 consecutive negative closings will change the sentiment of the participants in the market. Broadly, apart from banking and technology, almost all the sectors witnessed selling pressure. The movement in the markets was in line with our expectations.

A weak Venus will help the bear cartel, and the retrograde Jupiter will give strong support to the bull cartel. These two major influencing planets will increase/spike volatility, and the best strategy that will work in the current markets is a MARKET NEUTRAL long and short basket.

Technical

As mentioned in the review, the 3rd consecutive negative closing and the fact that in 7 weeks there have been only 3 positive and 4 negative closings is the first sign of weakness or that a corrective movement in the markets has begun. The gradual down move (distribution) will delay the recovery process, as pain will build in the system. On the other hand, a fast fall leads to an equally fast recovery, which has been happening for the past few months, and it is a sign of perfectly up-trending markets. At the moment, the technical level is at a strong BUY zone of 24,510 to 24,360. A strong inflow of funds around the zone is expected, and depending on demand and supply, the future course of the markets will be decided. There is no need to rush in or panic exit; markets give enough opportunities for buyers and sellers to act wisely. FOMO is the biggest enemy of a trader and investor.

On a bounce, up to 25,500, position reduction is recommended, especially if the failure to cross 25,500 in the coming week occurs. This will confirm 23,900 within 20 days, and the possibility of 22,496 within 40 days cannot be ruled out. The idea is not to create panic but to be prepared for these levels.

TimeMap

n the coming week, a strong bounce or pullback is expected, and as mentioned in the technical writeup, reduce leveraged positions. The Bank Index is showing signs of very strong positive influence for the next 15 days, which will keep the index in the safe zone.

Retrograde Jupiter Point 1 will give a big positive move in the banking sector, and the laggard or ignored banks will witness the emergence of strong-hand institutional buying. As always, markets will consider it index management. Point 2 will affect momentum stocks in the market, and even various momentum ETFs and the performance of aggressive fund managers will be impacted.

Everyone is thinking the Middle East is the biggest threat to the markets, but the fact is, political developments in the next two months will completely change the image of a party and its connected leader. We fear the major risk is internal and not a global event.

Broadly, in a rising market, reduce trapped and derivative positions, and whenever markets are in a big negative, look to accumulate fundamentally strong and technically sound stocks.

October 21, 2024: Monday: K.5: Mrugga: Auspicious Day

Gap will play important indicator for the week, we have observed Banks will steal the limelight, followed by selective Pharma & speciality MNC companies. Contrarian bets will reward. Swift action is the key, BTST (Buy today, Sell tomorrow) is highly recommended.

October 22, 2024: Tuesday: K.6: Aardra: Good day

Higher opening will indicate negative closing for the day, BTST should be exit or put trail stops. Wide movement is expected in the markets, directional trades will reward and remain in the profit-making trades and losses quickly.

October 23, 2024: Wednesday: K.7: Punervasu: Positive after 13

Lower opening s expected, buying oversold counter is recommended, mean reversion indicator will give better profitable trades. Tithi gives more edge to long side trades. Bulls will be rewarded today. BTST

October 24, 2024: Thursday: K.8: Pushya: Best Investment

Buying long term and investment in brand is highly recommended, one of the finest days for the business decisions and planning, putting thoughts on paper. Investment in agriculture land or real estate is recommended. BIG investment in Turnaround stories mulitbagger ideas. BTST indicated.

October 25, 2024: Friday: K.9: Vishakha: Volaitle Day

Tithi Navami first half give bullish, and second half gives bearish move in the markets, and this particular Tithi has been followed & experienced for years by us, higher opening and lower closing is the typical movement we get in the markets. Traders and speculators can adjust accordingly.

Markets are waiting for a blackswan reason for falling is the planetary position.