Stockology: Breakout in midcap stocks may surprise many investors

During the Sun's transit in Bharni, selling and short-selling opportunities at elevated levels may arise, particularly in sectors such as railway, taxation, insurance, event management, and tea companies.

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.

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Review – Giving a surprise to the participants is the favourite hobby of the markets. Monday opening in positive was a surprise to us, after that the overall movement was as expected, at the higher levels where selling pressure would keep mounting. Defence stocks took big price leap during the week, and on the other hand as expected under Ashwini influence technology stocks got hammered and many frontline stocks marked new lows. FMCG is still under pressure, and chemical stocks are getting ready for an up move.

Technical – While against expectation of a lower weekly close, markets gave a nominal positive close, still nothing has changed, selling pressure is expected to mount on every rise. From technical chart point the follow up bounce after breaking strong level of 21,850, is considered markets offering to reduce leveraged exposure and volatility would increase. The patience of the short-term traders could break in case Nifty moves below 22,060 again in the next 10 days, it could turn out selloff point. Global factors, apart from the fear of war, the banking system collapse in the developed economies are posing much bigger threat.

In the US, it has already triggered. As per our timeline October 2024 will be just like 2008.

Currently Election euphoria, improving data points within India, is giving lot of positive signals and we might see selective rallies in performing stocks. Bullish momentum in delivery is to be continued and stay put in case Nifty crosses 22,730. We are suggesting reducing leveraged exposure, continue to reshuffle delivery stocks. On the upside, first target is 22,777 and 22,985.

Also read: Rising US yields spark concerns for global equities amid economic uncertainty. What this means for Indian markets

TimeMap – Sun has moved in Nakshatra Bharani – considered positive and gives nice opportunity to book profits. Often under the influence of the Nakshatra, markets tend to perform well, and profit booking and reducing exposure is highly recommended. As expected TimeMap is negative and suggesting selling and reduce positions. Auto and healthcare are the two positive sectors, next positive is FMCG. Banks, IT and the worst is Capital Goods sector which is showing signs of big corrective movement, next weakness in the financials. Nakshatra Bharni is good for the relief or pullback rallies, Bharani (refilling) is an opportunity to exit from the trapped positions.

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Pharma sector is showing lot of positive signs.

Weekly view

April 29, 2024: Monday: K.6: PurvaShadha: Good day

Higher opening is expected. The opening gap should get filled by the end of the day. Markets have become very good for basket trading strategies, as sideways movement is best for market neutral basket strategies. We are going to witness another 6 months of sideways volatility. Breakout in midcap stocks will surprise many investors.

Natural resource and metals could hog the limelight. A smart recovery in IT cannot be ruled out. Negative closing BTST is highly recommended.

April 30, 2024: Tuesday: K.7: U. Shadha: Short sell Day

Divergence indicators could give the best results. Tithi is slightly bullish, and one should look for oversold reversal indicators for the buy side trades. Buy and SELL strategy would give nice intraday profits.

In case markets give big positive then BTST is highly recommended, crucial time to watch during the day is from 13.40 to 14.25 – 15 minutes signals can give magic trades.

May 02, 2024: Thursday: K.9: Dhanishta: Volatile day

Higher opening and rise in many stocks would suddenly make everyone active in the markets. Sentiment would be more of excitement and euphoric than normal, most people will be caught on the wrong foot, adding extra volatility. Greed in the market would be visible, surprise and excitement will hurt most of the participants, while sentiment would be positive, most traders will find their position by the end of the day in negative. Navami has tendency to trap bulls on the wrong foot, it is difficult to retain bullish profits earned under influence of Navami.

May 03, 2024: Friday: K.10: Shatataraka: Positive till 13

Listen to what market is trying to say or indicate. Market intelligence will play important role, delayed participation in the markets would give better clarity and profits. Trade executed from 10.30 to 11.45 will give much better results and can be carried as overnight trade as well. Natural resource especially Mining stocks could give best results.

Nakshatra ‘Bharani’– April 27th to May 11.

This is the Second Nakshatra.

Symbol is ‘Yoni’ The Female organ of production.

Deity is Yama, The God of Death, Dharma

Planet Lordship is Venus.

Position in the Zodiac is Sign Aries 13.21 to 26.40 Degrees.

The Sun moves through Nakshatra Bharni from the 24th to the 10th of May. Governed by the benevolent and compassionate planet Venus, this Nakshatra influences individuals to exhibit traits of loyalty, deliberation, and steadfastness. Those born under its sway are known for their patient nature, taking considerable time to formulate opinions, and displaying resilience in changing them.

Their work ethic is characterised by a slow but steady pace, marked by loyalty, determination, and consistency, ultimately leading them to triumph. They exert influence through their performance rather than politics, demonstrating unwavering resolve and optimism, even in the absence of apparent rationale. As partners, they excel in honesty, affection, and attentiveness, with their perseverance in long hours of labor contributing to their success. However, the negative aspect of this Nakshatra, governed by Venus and associated with the deity Yama, lord of death, manifests in tendencies towards materialism, avarice, and obstinacy. Individuals under its sway may encounter obstacles stemming from shallow thinking and impulsive decision-making.

While Venus beckons them towards the finer things in life, its alignment with Aries can foster dogmatism, leading to tumultuous circumstances. They may resort to forceful tactics, occasionally displaying ruthlessness, and their innate cautiousness may translate into self-doubt and a lack of confidence. Physically, they may tend towards a heavier build due to indulgence in food.

Nakshatra Bharni, aptly named, offers opportunities for liberation from stagnation. It often precedes significant market corrections or rebounds.

During the Sun's transit in Bharni, selling and short-selling opportunities at elevated levels may arise, particularly in sectors such as railway, taxation, insurance, event management, and tea companies. From a technical standpoint, oversold or overbought indicators prove most effective, with corrective actions occurring swiftly. Overall, the influence of Nakshatra Bharni signifies both challenges and opportunities, with individuals navigating a path between steadfast determination and the need for adaptability in the face of change.

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