In the last 5 sessions Nifty has corrected from a high of 6229 to a low of 5936 which is a good 300 points dip. Such a correction is normal but it got triggered due to many reasons which can be overbought status or the big drop in Nikkei and a little blip in US Markets.
Although the risk of a sharp rally in Indian markets in coming months because of VIX and Nifty sustaining higher still remains. We felt that it was a possibility last week but the correction has hit by surprise.
This correction of 300 points is still at 38.2% retracement of 5930 which remains a support which if holds the bounce can go towards 6050-6080 and post that we can review.
The move from 5500 was sharp and we can now expect some sideways consolidation or correction. The strategy should remain buy on dips. Good stock specific correction is definitely creating opportunities to accumulate.
Continue to maintain that investors should look strongly towards midcap/smallcap indices with next 3-4 months being very good for them as per our view.
Disclosure: Maintain the bullish out look mentioned at at 5500-5600. Review points at 5760/5930 on downside and 6250/6450 on upside. Focusing on picking some midcaps on the current dips.
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