Stockology: Technology and FMCG are taking over from the PSU rally

Time has come to be incredibly careful about the investments, and utmost detailed attention should be given to portfolios, protective strategies will give better results.

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.

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Review
The Nifty is near a major resistance point and we have just started seeing the first signs of that.

Except for Thursday, our date-wise expectations for the past week went haywire. It is clearly visible that technology and FMCG are taking over from the PSU rally. The selling was directional and broad-based — it was more of bulls unloading, and participation of short sellers was limited.

Technical

Two long candles on the daily charts makes a short term reversal extremely obvious. Going forward, volatility would rise significantly. As of now, 24,450 and 24,290 look like  buy zones, with the nearby stop of 24,140.

Per the technical indicators, as prices keep rising, the exit stops will also move along with the rise, and rightly so. From a short term perspective, exit stops are very close now, at 24,140. Generally, after a drop there is  a pullback rally, but in case the pullback fails to retrace 70 percent of the current high, then it's a clear sign that the markets will fall further. In that case, liquidating positions is recommended. If the recovery or pullback is below 50 percent, then it is a sign that aggressive short selling can be initiated.

Long term investors can hold back fresh investments for now.

Time map

While the time is slightly favouring the bullish camp, slowly and steadily other factors are turning negative, and the day time turns negative, the impact would be huge.

As of now, the markets are showing positivity in the coming week, even though  it looks like they will be volatile. Traders and speculators would be able to make money, but volatility will cause most small and midcap stocks to enter a long sideways, declining phase, which will hurt investors.

It is time to be very careful about  investments, and detailed attention should be given to portfolios, where protective strategies will give better results. SUN 120 NEPTUNE shows that a big plan will get executed, SUN 180 PLUTO indicates destruction at a political level, or of government owned properties.

It may happen somewhere else as well, and the impact could be felt a little later in India.

July 22, 2024: Monday: K.1: Shravan: auspicious day

It is an auspicious day to learn, research, read, share with others, get feedback, and work on improvement. Use market intelligence and avoid contrarian trade. Follow the leader and trend-setting stocks. The first half will be bearish but expect recovery in the second half. Buy today, sell tomorrow (BTST) is indicated.

Companies declaring positive profits can be aggressively chased.

July 23, 2024: Tuesday: K.2: Dhanishta: bullish day to book profits.

A higher opening cannot be ruled out, and select companies with positive results will hog the limelight.

A good bull trap can be laid today. So, operators would be active, and one should not fall for their deceptive rumours and signals. Avoid small temptations  unless the risk-reward ratio is hugely positive. Cement and healthcare businesses are looking very attractive on this day. A wide close (or movement?) cannot be ruled out, in whichever direction the market closes. Take a contrarian position in overnight trades.

July 24, 2024: Wednesday: K.3/4: Shatataraka: deceptive day

Tithi 4 will yield a lot of influence. It generates deceptive signals on the charts, and most traders and participants tend to fall prey. Erratic price movements are seen on such days, when seasoned players are active. We are expecting a negative day today. Sell today, buy tomorrow (STBT) is recommended in  overnight positions.

July 25, 2024: Thursday: K.5: P. Bhadrapada: good day, high momentum day

Tithi gives the best results on momentum breakout signals. This  combination of the tithi and nakshatra is the deadliest. It has the power to generate 5 percent-plus movement in the indices. We suggest caution, especially while entering leveraged positions. It is extremely difficult to predict the direction of the momentum. Opening levels would indicate the close.

July 26, 2024: Friday: K.6: U. Bhadrapada: auspicious day

Tithi 6 makes for  a nice corrective movement. The nakshatra is known for contrarian trades, which means that reversion systems should do well today. This also means square offs will see big profits, or in-the-money positions. Broadly, the week looks like it will favour the bulls, but  a lot of wealth destruction will also happen.

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.