CNBC-Awaaz, Managing Editor, Anuj Singhal
Yesterday the portfolio investors finally got a relief. Yesterday a big reversal was seen in the market intraday. Midcap and smallcap showed excellent recovery. Midcaps recovered 2% from the bottom and smallcaps recovered almost 3%. The advance-decline of 1:5 in the morning became approximately 2:1 by closing. Even though Nifty is at 26,000, midcaps are at 24,000. And small caps are probably around 22,000 or 23,000. As far as Nifty is concerned, yesterday’s low is very important. Yesterday we took support at 61.8% retracement of the rally and 50 DEMA. And now tomorrow’s low is most important, if it is broken it will be very negative. The next 2 days are very important, the Fed’s decision and trade deal are to be discussed. In such a situation, there is no need to take too much risk, just stay intraday only, now we will take a positional approach tomorrow evening.
Market: today’s signals
US Fed decision to come tonight, hawkish 25 bps cut expected. Statement by the next possible Fed Chairman Kevin Hassett – There is plenty of scope for a cut of more than 25 bps. Talks on a two-day trade deal will begin from today. There was a huge decline in India’s trade surplus with America. It has fallen from $3.17 bn in April to $1.45 bn in October. India has reduced crude import from Russia and increased crude import from US, but no major decision is expected in the next 2 days and now you cannot take any trade in the hope of a trade deal. When it will happen, only then will we make a strategy accordingly. Despite yesterday’s recovery, Nifty made lower low and lower high and now it is making lower low and lower high for two consecutive days.
And if Gift Nifty is correct then we will open around 150 points below yesterday’s high. In such a situation, saving the bottom line for tomorrow will become very important.
Market: What should be the strategy now?
The first thing is to be very cautious in mid and small caps. The constant CNBC-voice warned you in mid and small caps. When mid and small caps fall, they fall like this. In large caps, recovery comes eventually, but in mid and small caps, sometimes your prices do not recover. IPOs VS This market was the biggest loser. Bad IPOs and their cheerleaders spoiled the sentiment of the entire market and now most of the fancy IPOs are trading 40-60% down. Exit your stuck position in the next rally. It is not necessary that you have to do recovery where you are stuck. Book losses and move into good stocks, this would be a better strategy. 2026 could be the year of outperformance for large caps. Banks, Auto and NBFCs are still better sectors. Selected IT and Pharma may also remain positive.
Indigo: Now what?
Yesterday we took the view that we should exit the short trade now. The short trade has made huge profits in 3-4 days, but do not be in a hurry to re-enter the portfolio right now. The next 3-4 months may be full of ups and downs. If you can take risk then you can keep SIP strategy. Because it is not that Indigo is closing down. It is still the only profitable airline in the country, but yes, the government will definitely take some strict steps. There will definitely be some impact on profits and valuation. Traders will also get opportunities to short again in between. But the big short trade has been completely completed.
Sell Nifty if 25,900 fails
First support is at 25,700-25,750 (yesterday’s low, 50 DEMA) while there is no major support below 25,700 till 25,500. The first resistance is at 25,850-25,900. Major resistance is at 25,900-25,950. Buy if left at Rs 25,700-25,750, place strict SL at Rs 25,650. Sell if 25,900 fails, keep SL- 25,950. Both trades are strictly for intraday only.
strategy on nifty bank
Bank Nifty gave a rally yesterday right from the Lakshman Rekha zone. 58,700-58,800 is the Lakshman Rekha of Bank Nifty. If there is recovery then Bank Nifty may lead again. Buy if Rs 59,000 is left, invest at SL- 58,800. Currently no short trade in Bank Nifty.
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