Sensex technical View :
Sensex seems to be hovering around the 16700 zone and we need to see for some more days whether a good bottom is made or not . Bounce from the current levels will face resistance at 17600 and 18000 . Technically many ppl r looking towards the 200 day moving average as an indicator but historically the average has been broken in many deep corrections before but what is more important to note is the lifeline which has not been broken in last 5 yrs . So till markets sustain above those levels there is nothing to worry for investors and rather opportunities 🙂 . The strategy remains the same be ready with resources and be staggered in buying .
Another thing to note is all the corrections which touched the lifeline and larger magnitude corrections the consolidation period near to the bottom takes around 4-8 weeks. May 04 , may june 06 ,March o7 are the instances which have been seen.
Assuming the current low to be a major bottom we need to see it for next 3-5 weeks. As from the lows we are done with 3 weeks. Crucial level to watch in next 1 month is 17600-18000 ( near term ) zone and abov 19000. While on the lower 15800-16100 zone is the worst case .
Would review the long term tgts and come out with a more detailed analysis 1-4 weeks from now as during this period we should get a more clear picture. So go staggered for investors with partial quantities at every dips and for traders go with extreme care or avoid as overtrading doesnt help. For a good trader a couple of trades and kills should suffice rather then playing for every 2 rs tick and indisciplined compulsive trading.
Lots of midcaps and small stocks have corrected to good value levels and look good to be accumulated slowly as u dont know when they can start reversing or stabilize so one can start of with 40 % of desired qty frm now and then 10-15% at every dip or regular intervals.
But one needs to be selective and keep the no of stocks to lesser no as a very diversified portfolio wont be great rather more of core stocks would be bettter as downside risks are less in all but u need to see upside potential and good funda stocks would be quick ………
Sun Pharma Advanced, GTL infra, GEI inds co , Core Projects , Viceroy Hotels , Alok textiles , Gremach Infra , Nagarjuna fert , Videocon Inds are some of the picks which have corrected a lot and back to levels which look good only on basis of future potential . As all these stocks may not have great earnings and high p/e multiples now also but with a 1 yr view can give more returns from here. Do ur own research on the above to make a portfolio and they ccan see still 10 odd % downside from here also so go slow and accumulate
On the extremely defensive side certain stocks which are looking good with lower downside could be Revathi , Sadbhav Engg , GAIL , SBI , Reliance .
The list could be very exhaustive as there is whole lot of value in the broad indian market but yet again be selective and go slow as u will need to be patient and keep a view of minimum 3 months . You may end up getting quick returns in good sentiments but buy with a patient view .
Short term players and impatient investors who cannot see red on the portfolio can wait for next couple of weeks and look for a stable and comfortable market to start of..