Stockology: Markets in sustained bull markets; What do the stars hold next?

With the Sun in Moola Nakshatra, over 45 percent of the index stocks exhibit positive signals in our ZodiacAnalyst, historically resulting in favourable market movements

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. 

The Nifty closed at 21,456.65 gaining 487.25 points in a single week, the index movement even surprised seasoned market players. Our previous write up highlighted that a Nifty level of 21,275 should be used as the first profit booking level, but we were not expecting this kind of strong move in such a short span of time. The opening gaps on daily and weekly technical charts will be filled sooner than most anticipate. PSU companies continued their upward movement, and the best part was that the private banks confirmed the reversal and technology sector entered the second up-move.

We express our optimistic outlook through the 'Pricebridge Upswing' multi-cap equity portfolio, which was over 96 percent invested as of the commencement of December 15, 2023. Throughout the day, we strategically secured gains by realizing partial profits. This practice of profit booking, coupled with maintaining cash reserves for potential opportunities, holds significant importance for portfolio investors.

Also Read: Dalal Street Week Ahead | BoJ decision, RBI MPC minutes among factors that will keep traders busy

Technical – The Indian equity markets are now in the midst of a sustained bull market, poised to generate wealth for investors. The current market scenario echoes the trends observed from 2004 to 2007, particularly favouring the small and midcap sectors. During that period, investors who actively managed their portfolios and stayed invested were generously rewarded. It is advisable to view volatility and panic selling events as opportunities to enter the market.

Short covering and compulsive buying are pushing the markets up. The big target of Nifty is 22,100-22,420, and we recommend slow and steady profit booking. When the risk-reward ratio favours the bear operators, trading long positions should be trimmed. On the daily chart, the nearest stop is at 20,750. Momentum-savvy investors remain in long positions, as there are no signs of reversal and use 21,065 as the closest stop exit. Traders should reduce longs and have stops punched in the systems. The fast rise will give equally quick correction.

Also Read: Flood of IPOs next week | 12 public issues hitting Dalal Street with 8 listings lined up

TimeMap - With the Sun in Moola Nakshatra, over 45 percent of the index stocks exhibit positive signals in our ZodiacAnalyst, historically resulting in favourable market movements. While the Nifty surpassing 21,000 levels wasn't unexpected, its occurrence between December 1st and 15th surprised us, as we initially anticipated this breakout to take place in the December 17th to December 30th timeframe. The ZodiacAnalyst continues to display a bullish bias, but with a decrease in efficiency, suggesting that the risk-reward ratio is no longer as attractive for bullish traders.

We have noticed that when Venus is positioned in its own or a compatible astrological house, wealth destruction tends to be averted. Additionally, if any detrimental financial events occur during such periods, the recovery process is typically swift.

Also Read: Google’s Gemini: is the new AI model really better than ChatGPT?

Venus, a key facilitator of wealth creation, is set to enter the challenging astrological house of Scorpio, ruled by Mars, on December 25th. It's noteworthy that Scorpio, associated with the 8th sign and house symbolizing transformation or termination(end), is where Venus, the guardian of wealth (Laxmi), will be transiting. This transition comes after seven weeks of continuous ascent, marking the onset of the 8th week. The convergence of number 8 is suggesting 2nd red flag for the steep correction.

We do not want to spread panic or fear; it is just a warning not to go overboard. As a PMS fund, we will keep investing as funds keep flowing, and we have to invest, as positive opportunities exist in all the conditions. We suggest investing only during corrections & panics sell-offs and avoiding leverage and excess trading for quick money, as the next 30 days are not easy for trading and wealth creation.

Key Insight of the Week: The trend-following system yields optimal outcomes when Planet Jupiter (representing Momentum) and Mars (symbolizing Energy) are in favourable positions and compatible houses.

Also Read: IT, pharma likely to be biggest beneficiaries of FII inflows. Here's why

It's essential to reiterate that TimeMap doesn't provide market direction; instead, it offers the most opportune times to capitalize on and assess the potency of each day.

Moving forward to our regular weekly day-wise input for the bulk and SIP investors, and some for the traders.

December 18, 2023: S.6-15.13: Shatataraka: Auspicious day

Gap down opening is expected. Tithi generally gives a nice corrective move against the main trend, and Nakshatra Shatataraka indicates deep pockets and seasoned players are very active in the markets, and there could be more block deals. We are expecting metal stocks to get a further boost on the back of Mercury 120 Jupiter aspect, which will give a boost to communication sector companies. Some legal positive verdicts will give a big positive to a large cap. BTST recommended. SIP investments in ETF, MF, and stocks are recommended.

December 19, 2023: S.7-13.07/S.8: P.Bhadrapada: Volatile day

A higher opening of the indices cannot be ruled out. Sentiment in the market is positive and participation from all the sections will push volumes up. Traders can be active as volatility would give nice entry and exit. A positive close is expected today.

Also Read: Eye on elections: Will FIIs flock to India and front-end investments?

December 20, 2023: S.811.15/S.9: P.Bhadrapada: Volatile wide moves

A flat to negative opening and slow gradual upward movement could be the index movement today. Tithi & Nakshatra both have the highest influence on Divergence Indicators and also give the best trading opportunities. Today, traders with proper homework and clarity, and systematic execution would mint money. STBT is recommended, especially for stocks with top-out patterns, like hanging man or reversal candle patterns.

December 21,2023: Thursday: S.9-9.37/S.10: Revati: Auspicious Day

An auspicious day to invest long-term, and SIP as well. Gap down opening is expected, and panic selling cannot be ruled out today. Nakshatra is extremely sensitive and participants tend to overreact to even small external news. Caution is advised, avoid the contrarian style of trading and only look for position trades. Media and Technology stocks will be in the limelight, post-14.30, there is a bright chance few stocks will give a V-shape recovery, especially retail and branded stocks will do extremely well. No BTST or STBT was suggested today.

December 22, 2023: Friday: S.11: Ashwini: Position trades

Tithi is slightly bearish, and Nakshatra is good to invest in new-age companies and start-up, media. Oversold reversal indicators give the best results, slight delayed participation will give better outcomes. Technology space is best to trade today. BTST recommended.