Well Hello ! Suddenly Markets fall nearly 1000 points in 3 days and all the people in the world who were cribbing that they missed out on the rally start panicking ! Lol.. First they had FOMO(Fear of Missing out) and now they seem to have TSTE(Too scared to enter)
When markets were at 13000, I was one of the few people who stuck my neck out and mentioned that Nifty would hit 15000 purely backed by liquidity. Its the same people right now who are pulling out the liquidity. FII’s always have a tendency to either keep buying or keep selling, once they start either, they tend to do it for a fair amount of time. So the very first day when you saw a big sell number, i.e 1000cr plus, you should have taken the warning.
Generally in the recent pass you have seen that when FII’s buy, DII’s used to sell which somewhat stabilised the markets, but now when the FII’s have started selling, if you notice, the DII’s aren’t buying. This is because they are waiting for lower levels to enter. DII’s infact were selling even when Nifty was at 11500 ! lol… so why in the hell would they start to buy at 14000. Having said all this, this fall that is underway is actually going to be one of the best points to enter the market from a medium to long term point of view.
Let me give you another reason on why this fall was expected. When Nifty broke the previous all time high at 12400, it did it decisively and with force. But notice when Banknifty broke its previous all time high, it literally crawled and struggled to do it. In fact the last 1000 points to break the high was a humongous effort. Institutions deliberately try and break old all time highs to trap momentum and retails traders, hence the slow nature of the move to break previous highs just to trap was another sign.
Let me get into some specifics now, Banknifty we are looking to buy in 2 tranches, one close to 29000 and the second one close to 27000. We don’t expect a fall significantly below this. This is from a 3-6 month horizon. Even if we miss the second tranche, we are happy with the area we are entering at first. Nifty I would wait and watch and see how it is behaving around the 13000-13500 range band to take any further decisions.
Coming to being stock specific as we like it. Asian paints is on my radar for a first tranch entry around 2350 for the long term. HDFC is on my radar for an entry close to 2300 for a first tranche once again. Premiums for some stocks are actually sky high, eg: Tata motors, looking for a short strangle on that one. Expecting a good movement in Bajaj Finance and hence entering into some bi-directional positions there. We continue to hold DR. Reddy from last time round. Wait for the market to stabilize and show strength, and if this time also you miss it… Well FOMO will make you doubly sad this time round !!
