Stockology | Unabated selling may be triggered in Nifty at 22,390 and 20,870

Weekly charts will turn negative at 20,870, opening another downside target of 20,100. Currently hold 7-10 percent cash in the portfolio, as on the upside, 22,390 seems an extremely tough zone to cross.

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.

Last week, equity markets witnessed a volatile price movement in many stocks. As expected, a few stocks got hammered. Paytm and L&T were prominent among the beaten down stocks. As per TimeMap, the energy sector kept up the bullish sentiment, and many counters still look undervalued. Banks, NBFCs, and insurance sectors are not bullish but attractive as low-risk bottom fishing bets.

We are not surprised by the volatility, as TimeMap was showing 50:50 equal weight to bullish and bearish traders, and our opinion was slightly stock-specific bearish and best for speculative trades. While the recovery is surprisingly strong, even the follow-up buying seen in the energy sector is somewhat scary. We always accept the fact as it is.

Technical: We have advised part profit-booking and exposure rebalancing to reduce portfolio beta, as charts have given the first confirmation of 20,450 within 30 days. Critical levels on the Nifty charts are 21,290 and 20,870; last week’s Nifty movement created a decisive exit point for the leveraged positions, which is 21,100.

Also Read: Primary market action: 5 IPOs opening for subscription, with 6 listings scheduled next week

Weekly charts will turn negative at 20,870, opening another downside target of 20,100. Currently hold 7-10 percent cash in the portfolio, as on the upside, 22,390 seems an extremely tough zone to cross.

Looking at various AI models and TimeMaps, unabated selling can get triggered around 22,390 and 20,870. Once the sale begins, the stop limit would be 550 to 600 points.

Bank Nifty is showing low risk better reward status at the current moment.

Energy and PSE sectors are positive, but will surely consolidate at the current levels, so the momentum will ease and remained stable.

TimeMap: As mentioned, there is ongoing targeted wealth reduction. The upcoming week indicates that the bullish trend still has considerable momentum. Despite significant wealth depletion, the repercussions will persist, and we recommend adopting a more prudent approach for greater sensibility. In the coming week, aspects of Mercury 0 Pluto have historically given wealth destruction due to natural disasters.

Institutional investors fund flow toward the FMCG, metal, and PSE still show strength, and there is a long way to go. The best day of the week for the bulls is the 7 February, aspect of Uranus 120 Venus, which significantly boosts the price of OIL companies, in the energy sector. The Mars 60 Neptune is suitable for research companies in every field. We are becoming more sceptical towards the markets.

Also Read: Paytm denies facing ED probe amid RBI action against banking arm

Standalone Mercury is entering sign Capricorn, which is bad for the traders; the next 25 days might not prove suitable for the traders, and most will suddenly start witnessing weekly negative P&L (profit & loss). Currently, the traders' confidence is already at an all-time high.

February 5, 2024: Monday: K.10: Jyestha: Good For Short-Selling 

The higher opening is a clear signal to sell short. Day traders will make more money by selling and buying trades. The nakshatra of Moon is best for creating short-term sell trading positions, and it is auspicious to build positions. External news can hit the sentiment in the markets.

Metal and Energy sector top formation in a few stocks is a strong possibility.

February 06, 2024: Tuesday: K.11: Moola: Volatile Bullish

Auspicious Tithi to initiate new activity, new positions or enter a contract. Crucial time to watch during the trading hour is 13.13 to 14.10; a quality signal can give money-minting trade.

The automobile sector could be the best to trade, and the following are real estate and cement. BTST (buy today, sell tomorrow) is highly recommended.

Also Read: F&O Watch for Feb 5: NALCO, GMR Infra may enter ban list, SAIL may exit

February 07, 2024: Wednesday: K.12: PurvaShadha: Good till 14.00

A flat to nominal positive opening cannot be ruled out. Comparatively, it would be a boring day. Activity in some stocks would drop, especially the small and midcaps. The choppy movement would make day traders restless, and frustration would force mistakes. Wise this is to stay away from the markets. STBT is selectively recommended with 72 hours of trade life.

February 08, 2024: Thursday: K.13: U.Shadha: Bad day

A negative opening of indices is expected. After 11 am, a slow and steady recovery in many stocks would increase hopes of the perennial bulls. Post 14.15, we expect a piece of external news or influence to shake the bulls' confidence, and many might exit from the long positions; unwinding can trigger a wave of a sell-off in the markets. In case of of sell-off BTST is highly recommended.

February 09, 2024; Friday: K.14: Shravan: Bullish day

Market opening would be sluggish, and slow start would refrain most participants entering the positions, lower volumes trigger price volatility. Market intelligence of news flow would give the best trades, do look forward to big deals and large volumes and participate with them.

Overall while markets will remain stable and nominal negative weekly close is expected. In our opinion looking at the market TimeMap, looks like market breadth would be negative and midcap and small cap would see lot of outflows.