Q4
After several weeks, the market seems ready to sell. While NIFTY 50 may appear flat at first, the real damage is being done in the midcaps and small caps; to get a sense of this, watch how NIFTY 500 is performing.
The only level I have been watching since February 1st has been 21650. Once we comfortably close below this for at least two days, including today (February 12th ), we very well might be in the correction phase, as I suggested in my previous write-up.
When I wrote my last post, I was quite clear that the market would only move higher in the near future, which is exactly what happened as it set new all-time highs. Since then, it appears that booking some profits and converting to cash would be wise.
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Above 22150, the bearish bias is negated.
You should be taking profits in railways and PSU banks (if you have not already), these can easily correct up to 30–40%
To sum it up, a bounce from here should be sold; a continuous close below 21650 establishes the bias. A lot of people would think that we are just about 2.5% away from all-time highs, and I am talking about selling, but when it comes to trading stocks, I would happily sit out for days and wait for the market to build desired setups rather than jumping to the gun, longing every dip, and losing it all in a matter of days. The last two days of selling stocks are just a precursor to what can follow in case major indexes go into correction.
If everything plays out how it’s expected, we’ll probably bottom near April and bid into new highs in the second half of the year. As always, views in the market are dynamic and can change within a span of time. I might be bearish today but can turn bullish tomorrow. Do your own research before investing or trading.
