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: as expected, the markets are regularly hitting new highs. Last week, defence stocks were on steroids and we can see the frenzy spreading to other sectors as well. A higher close in the week ended July 5 indicates that the undercurrent is strong.
The rally has surprised most participants. Strong recovery was seen in specialty chemicals, banks and tech stocks are also seeing some turnaround, and the last day was hogged by metal stocks. But the increasing aggression is making me extremely uncomfortable.
Technical: the markets went up by another 313 points last week. The Bank Nifty also performed well, going above the 52,640 to 53,500 zone. Profit booking was expected, but HDFC bank became a hurdle and arrested the momentum. Overall, indices are looking stretched from a valuation perspective, and caution is advised. We have been advocating that one should remain invested and keep trimming leveraged and high-beta positions. Technically, FMCG and pharma indices are showing positive movement and technology can be a defensive sector.
The euphoria in cement, PSU, and defence stocks will come to an end very soon, but the service sector can perform well. A spike should be taken seriously.
Time map: last week, we mentioned that the markets would become more volatile after July 6th, and value-investing would see the maximum investment. Accordingly, while the time map is not bearish, it indicates change in investing strategies 6th July onwards till the end of the month.
The coming week is likely to close on a positive note, which means we're probably going to see another new high. July 11th could be an important day for the markets, generating signals that could play an important role from a medium-term outlook. Many stocks may peak on the charts.
The Sun / Saturn aspect, and Venus / Neptune aspect will initiate new sector and stock signals on the charts.
July marks a pivotal moment for equity markets, setting the stage for the emergence of new sectors poised to thrive over the next two to three years, driven by visionary investors. Stocks and sectors primed for exuberance often reach the peak of euphoria by end-October.
July 08, 2024: Monday: S.3: ashlesha: big movement day
The tithi indicates a higher opening, and aggressive orders by participants. Often, the markets move directionally after about an hour of initial volatility, and whichever direction they go in, the movement is more than normal. The ashlesha nakshatra means that metals will be in the limelight, and we suggest you keep stop-losses punched in the system. Any wrong trade should be squared at the earliest as mistakes are punished severely under this nakshatra. Use momentum breakout indicators for intra-day as well as position trading. Overnight positions should be contrary to the day’s closing. BTST (buy today, sell tomorrow) is indicated in cement stocks.
July 09, 2024: Tuesday: S.4: ashlesha - 7.05 / magha: volatile bullish day
The tithi is slightly bearish and gives a lot of misleading signals on the charts. The investor subconsciously feels the cosmic uneasiness, which leads to errors and mistakes. The nakshatra magha has indicated positive movement in real estate and cement stocks. Traders should be able to gain from the high volatility.
July 10, 2024: Wednesday: S.5: magha 10.15 / P-Falguni: bad day
The fifth tithi indicates smooth trading activity, which will be directional more often than not. The markets should open on a positive note, and there could be selling pressure from global investors after 10:30 am. A contrarian trading strategy would give the best results. A short selling strategy would have a slight upper hand.
July 11, 2024: Thursday: S.6: Purva Phalguni: good day
A flat-to-negative opening is expected. The market sentiment would be slightly positive, but cautious. Investors are expected to get aggressive in the second half of the day, and buying will lift the market sentiment. Selling is recommended after 02:30 pm, and STBT (sell today, buy tomorrow) is also recommended. We are expecting a positive close on this day, but in case of a negative close, then from a time map perspective it would be a very adverse development.
July 12, 2024: Friday: S.7: Uttara Phalguni: auspicious day
The day's tithi is bullish by nature. The nakshatra is best for speculative trading and index stocks respond very well to technical signals. But a big, negative closing cannot be ruled out, and if that comes to pass, it would mean that the markets will see a big correction in the coming few weeks.
Divergence indicators can throw up the best trades of the day.
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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