Stockology: Upcoming weeks are ideal for SIP, STP and steady accumulation strategies

Sector leaders are expected to attract focused investments, with capital shifting from mid- and small-cap companies back to large-cap stocks.

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 of Last Week:

On January 6th, the markets delivered a nasty surprise by falling more than 400 points in a single trading session. This clearly indicated that markets would decline further. On January 8th and 9th, we expected significant drops, and except for the 7th, all trading days ended negatively. The week concluded with a loss of 573 points. Most charts have turned freshly bearish, and many have confirmed new downward targets, indicating that markets are unlikely to provide a pullback rally but will lose further ground.

Both the banking and IT sectors showed mixed signals, leaving technical analysts confused and unable to make confident calls on either sector. Last week, banks issued fresh sell signals on the charts, while the IT sector recovered from its lows.

Also read: Dalal Street Week Ahead: Q3 earnings, US & India inflation, China GDP, oil among 10 key factors to watch

Technical Analysis:
The breaking of 23,530 is confirmed with a weekly closing below this level, marking the lowest closing since June 14, 2024. Technically, the monthly and weekly December closings (as of January 3rd) suggested potential pullbacks in many stocks. While FMCG and select PSU stocks responded positively last week, a greater number of patterns failed, and many charts breached strong accumulation zones. This includes the Nifty, suggesting that 22,700 is not far away, and 22,420 could be a quick target for short sellers. Broadly, the view is that markets will dip below 23,000 before recovering.

The upward target for the Nifty in 2025 is 26,800. Confirmation of this target requires crossing 24,468, ideally within the next 45 days. A monthly closing above 24,468 will confirm the target of 26,800 within five months.

TimeMap:
Last week ended on a negative note, as anticipated, but the extent of the drop was worse than expected. The coming week favors the bearish camp, and bulls may need to wait a few more weeks for their turn. Companies with long-established track records, having successfully navigated industrial and technological transitions, are poised to perform the best over the next two months.

Sector leaders are expected to attract focused investments, with capital shifting from mid- and small-cap companies back to large-cap stocks. An astrological event, SUN 120 URANUS on January 13th, aligns with this bearish sentiment.

We maintain a slightly bearish outlook for the coming week, anticipating that many stocks will hit new lows, making it challenging to profit from long positions.

Another significant planetary aspect occurs on January 14th – Venus 90 Jupiter. Here, Jupiter in Taurus and Venus in Aquarius represent a tussle between the banking and technology sectors. Banks are linked to Taurus, while technology is linked to Aquarius. Over the next three months, technology is expected to emerge as the winner.

The strengthening of Venus in the coming days is another factor that could lead to market bottoming. Historically, a strong Venus has correlated with increased consumption and overall economic growth. Venus’s prolonged stay in Pisces will create excellent money-making opportunities, particularly for individuals with a positive Pisces influence in their horoscope.

The upcoming weeks are ideal for SIP, STP, and steady accumulation strategies. When markets are significantly negative, increase SIP contributions, then return to normal levels. Wealth can be built through consistent, disciplined efforts over time.

Weekly Forecast:

January 13, 2025: Monday – Pournima: Aardra-10.38/Punarvasu: Bad Day
The tithi may improve market sentiment. Generally, people tend to become enthusiastic, excited, and optimistic without valid support, which is risky for traders. The Nakshatra change is highly positive, occurring at a time when the market is extremely oversold, creating turnaround opportunities. Smart money will start moving into undervalued stories. BTST (Buy Today, Sell Tomorrow) is highly recommended.

January 14, 2025: Tuesday – K.1: Punarvasu/Pushya: Happy Day – Investment Day
A slightly higher opening is expected. Overall market sentiment is likely to be positive, especially post-lunch. Aggression from insurance companies following the Nakshatra change will lift indices. This is the Investment Day of the Week, with opportunities for both buying and selling, offering decent profit-making potential.

January 15, 2025: Wednesday – K.2: Pushya/Ashlesha: Bad Day
"Bad day" here does not mean negative; instead, it suggests avoiding long-term investments. Focus on jobbing trades. Among Nakshatras, Ashlesha provides the best results for momentum breakout signal trades. Sectors like steel and high-beta counters perform well. BTST (Buy Today, Sell Tomorrow) opportunities are available in cement and auto stocks, as well as select monopoly product companies.

January 16, 2025: Thursday – K.3: Ashlesha/Magha: Bullish Day
The 3rd tithi is traditionally favorable to the bullish camp, offering consistency. While the tithi drives momentum and direction, Nakshatra influences emotions behind actions. This is a day for pyramiding winning trades and adding positions in momentum plays for quick exits. It is ideal for daredevil traders.

January 17, 2025: Friday – K.4: Magha/Purva: Volatile Bullish Day
This tithi is deceptive, and contrarian bets against indicators may yield the best results. The strategy is to delay participation and then follow momentum, creating significant profit opportunities. Trend-following works well with a slight lag.

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