Stockology: Better to sit on cash rather than push for investment

The recovery in Nifty from the low of February 12 indicates confidence and the inflow of huge funds towards the equity markets.

Stockology is a weekly column by futurologist Mahesh Gowande. He is the founder and director of Ayan Analytics which has developed ZodiacAnalyst. It is a research software, with time and price charting tools, and it is exclusively used along with technical support.

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February 18, 2024: 

The recovery in Nifty from the low of February 12 indicates confidence and the inflow of huge funds towards the equity markets. After a minor sell signal, the recovery was strong, surprising us. While we are incredibly watchful and slightly bearish on the markets, we reiterate that unless a clear sell gets triggered on the weekly charts, there is no need to panic sell; as a strategy, just keep booking part profits. The euphoria in the oil and energy sector could continue, and PSU banks would also continue the upward move.

Technicals - After a minor sell, the reversal was solid and showed signs of a new high; if that happens, it will bring the exit stop closer to 21,110. The best thing that happens for the bullish traders is nearing the confirmed stop loss. Nearer stop also attracts fresh funds, as confidence also improves. On the upside, 22,600-22,850 will attract mechanical machine selling, which would be an aggressive selling. The crucial exit stop is 20,700 and breaking 20,100 will trigger a significant weekly corrective downtrend. Opening the downside of 19,154 and 18,720 levels. This week, many people asked what the 18-month target could be. 23,350 and 24,150 could be the upside, which is very ambitious for the Nifty.

Also read: Dalal Street Week Ahead: FOMC, MPC minutes, oil prices among 10 key factors that will keep traders busy

TimeMap - As we had mentioned, a few significant wealth-destructive planet aspects are lined up from February 11 to 19th; many times, it is observed that the event happens within 1 to 10 days from the day of the aspect. Mercury 90 Uranus & Venus 0 Pluto, on the 17th, will undoubtedly impact wealth destruction either in markets or some natural calamity in the coming few days. After this, the significant aspect is Mars 0 Venus on the 22nd, directly related to capital markets & commodity markets.

The overall week ahead will give a negative closing compared to the opening of Monday and the close of February 16. Our view is harmful for the week. Investment only during panic or significant declines is recommended. It is better to sit on cash rather than push for the investment. Pharma sector and private banks reducing exposure is recommended. A corrective rally in Chemical and FMCG and consumer space is visible.

February 19, 2024: Monday: S.10-8.51/S.11: Mrugga-10.33/Aardra: Big movement day

The sentiment in the market will be very positive. Most swing traders and participants will come to the markets with lots of ideas & trade in their made. Tithi and Nakshatra's change after the market opening would have a powerful influence. Many stock charts would register long spike candles, triggering the stop from both sides hurting the investors and traders. Many stocks would break their recent lows and enter into a short-term downtrend. Nakshatra Aardra, as the name suggests, tends to give Windfall gains or losses—For example, OMC gains & Paytm losses. Tithi 11 is auspicious and shows slow and steady declines. Today, short sellers can mint money. STBT overbought large cap sector leaders indicated.

February 20, 2024: Tuesday: S.11-9.56/S.12: Aardra-12.13/Punervasu: Turnaround Buying 

Gap down and initial selling should settle around the 10.45 to 11.30 zone. Look for oversold reversal in stocks that have been excessively hammered in the last eight days. Stocks that have failed to participate in the current euphoria would attract attention and start moving upwards. BTST is highly recommended.

February 21, 2024: Wednesday: S.12-11.23/S.13: Punervasu-/Pushya: Auspicious day

Today and Tomorrow are the SIP days of the week. The market-neutral long-short baskets would be the best strategy, or reversion baskets can be best for trading. In the 2nd half, some stocks will give a swift rise; those who can act fast or have intelligent tools to participate will be able to make a lot of money by the buy side trades. STBT is indicated.

February 22, 2024: Thursday: S.13-13.22/S.14: Pushya: Volatile Day

This is the best day of the week for position trades or long-term investments. A long-term investment above the 3-year view or with specific creative thought can be made today, especially in the private equity space can be considered. By the end of the day, contrarian trades will give much better profitable trades. BTST is indicated in metals and very high beta stocks.

February 23, 2024: Friday: S.14: Ashlesha: Good to Sell

Tithi gives the best results on proactive actions. Aggression and swift actions are the key winning formula for today. Focus on high beta stocks, Momentum indicators will give the best trading opportunities, and consolidation breakout even better. Metal as a sector should give good opportunities, and especially in Steel companies can hog the limelight.

We are yet to see a major breakdown sort of position in the TIMEMAP or a complete reversal in the trend, so ideally, continue to participate in the rally. Sector rotation and fund would get rebalanced as per need and demand from the big investors.

Also read: Nifty closes the week above 22,000; smallcaps give double digit return despite index ending flat

The automobile sector would be a nice surprise, companies with huge land banks will become active, and a lot of wealth creation could happen in such companies.

Monday's positive closing is a bright chance.

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.