Stockology: Volatility would be high, and hammering will be stock-specific

Don’t wait for confirmation to go with your study and stick to your strategies

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

As expected, below 24290, buying emerged in most of the sectors and stocks. The Budget day panic hit or spike breached 24140 but immediately recovered, and for the next two days there was some element of exposure reduction happened. On Friday, markets once again surprised everyone by closing very near to an all-time high.

We had specifically mentioned that the time is not bad; while other parameters are turning slightly negative, the markets won't crash. The midcap space is becoming attractive and as a growing economy, it looks like many midcaps will enter the large-cap category in the quarters to come.

The biggest shocker came for the realty sector with the removal of indexation. The sector will witness reduced demand, more people might prefer to pay fewer taxes, and show less value in the transactions. One will have to accept the simplified tax regime going forward.

Technical

While markets are entering the slightly expensive zone, volatility is set to increase further. The first four days after decline and single candle of the last day of the week have not equalised the losses of the four days. Technical Analysis is simple, and by following basic rules anybody can use it to improve returns and reduce the stress of trading. As per technical, markets have not given a sell signal on short- or long-term charts, therefore, there is no need to anticipate and take actions. After the sell trigger, markets give relief rally to exit from the positions, which is an easy and simple approach. As long as the signal is 'stay invested', do not keep churning the portfolio.

The new high close after the spike has made a change in the short-term stop to 24050, and confirmation of exit from trading position is at 23970. The weekly stop is at 22370 and monthly stop is at 21240. On the upside, short-term targets are 24949, and 25241. Both the targets look easy to achieve. Given that the bullish euphoria is mounting day by day, the above target could easily be achieved.

TimeMap

As mentioned last week, technical gave a small sign of correction – as an opportunity to invest, fundamental factors turned slightly negative. The time influence was positive last week, and is showing positive for the upcoming week as well. There are no major planetary aspects, except on Friday during Venus 90 Uranus, which is negative for the markets. In the current week, banks are coming as negative, and PSU continues to be in a positive phase. Big change is expected on the 30th, as after 10.45, the Sun is entering Nakshatra Ashlesha, which is very positive for the natural resource sector, and particularly for the steel industry. Government-owned mining and metal stocks might attract big-ticket buying from institutions and long-term investors as well.

Ashlesha gives the best consolidation and momentum breakout signals, and if on the right side, then BIG money can be made in a short span. Volatility would be high, and hammering will be stock-specific more than broad markets.

July 29, 2024: Monday: K.9: Bharni -10.55/Kruttika: Good to Book profits

Higher opening and further rise in the first hour cannot be ruled out. As per the earlier observation – Tithi and Nakshatra combination is good for booking profits, and selective short selling as well. The Moon is in Kruttika after 10.55, which means that hourly divergence signals can be aggressively actively participated in to make lot of profitable trades. Realty and banks would be volatile, while textile and retail store stocks will attract investments. Keep an eye on metal and mining stocks, especially the government-owned businesses, as next 10 to 13 days are very positive for the sector. Sell Today Buy Tomorrow (STBT) is indicated.

July 30, 2024: Tuesday: K,10: Kruttika -10.23/ Rohini: Volatile after 5

Lower opening of the markets is expected. Mean reversion indicators will give the best results today, and long short baskets will do very well. Bias is negative for the day. Participants would be nervous, and volumes would drop slightly in the pre-lunch session. In the second half, participation would increase. IT sector and communication would see buying, and midcap will witness profit booking and selling. Big probability markets will see a negative closing.

July 31, 2024: Wednesday: K.11: Rohini-10.13/Mrugga: Volatile bullish

Market sentiment will generally be cautious and slightly nervous under the influence of Tithi 11. Post 10 am, a sudden flow of orders will bring volatility to the markets. Fast action or quick reaction will bring big rewards. One of the best days of the week to participate in a contrarian trade and increase the position once in favour. Aggression and speed is rewarded under the influence of Nakshatra Mrugga. Index movement will be very wide, and option trades can mint money. High Beta stocks and momentum indices will do well.

August 1, 2024: Thursday: K.12: Mrugga: Good day

Proactive actions get rewarded. Don’t wait for confirmation to go with your study and stick to your strategies. Execute as per trade plans and do not deviate from your own ideas and plans. Prices will misguide and
create doubts in your mind. Even the most confident people will feel the pressure and tend to back off. We suggest you to be confident and trust your strategy. Systematic traders will make the best profits on August 1. Technology, communications, and logistic sector stocks will hog the limelight. Buy Today Sell Tomorrow (BTST) is indicated.

August 2, 2024: Friday: K.13: Aardra: Bad Day

Higher opening and rise will be followed by unexpected selling in many counters. We suggest participants to remain alert, especially post-lunch, our observation indicates. Sudden sell off in select counters will disturb the sentiment. Tithi 13 is bad for sector leaders; expect oil and gas sector to get especially hammered. Uranus 90 Venus will be destructive for select companies, especially those that have gone way ahead of their valuations.