Sacchitanand Uttekar, DVP–Technical (Equity), Tradebulls Securities says that he expects the Nifty to scale towards the 20500-20800 zone during the Samvat 2078 itself with some intermittent corrections that would provide timely opportunities to add longs.

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In an interview with ZeeBiz’s Kshitij Anand, Uttekar expects sector rotation to remain healthy as his focus remains on Unlock themes, Consumption, Healthcare, Rural-Agri. focused business, Digital & Telecom, along with Financials. Edited excerpts:

Q) A holiday-shortened volatile week. It remains to be seen how the D-Street reacts to the US Fed policy outcome. What should be the strategy for the coming week after a 4% fall seen from recent highs?

A) ’Inside Bar’ formation on the weekly close post the breakdown below its 5-WEMA after 13-weeks of trending above the same is a sign of consolidation to weakness.

Weekly trend strength indicators such as RSI & ADX are showing signs of exhaustion. RSI divergence exhibits up move if any to be fragile with resistance firm at 18030, followed by 18500.

The convergence of short-term averages at 18000 could act as a confirmation zone for the revival, and a close above 18030 would serve as a confirmatory sign for the revival at least on its daily scale.

The key support level for the coming week stands at 17660 (Broadening Support), which may emerge as an ideal zone for reviewing trend strength for a possible rebound, while 18030 may serve as a resistance zone.

Short-term traders should adhere to long-short opportunities until clear bullish reversal pattern signs occur. A breach below 17810 on the downside would result in a sharp decline towards the 17660-17600 zone, and hence, it is ideal to remain cautious throughout the week.

Q) We saw plenty of multibaggers in SAMVAT 2077. Do you think SAMVAT 2078 will be as vibrant? What should investors do with stocks that have more than doubled in the last 1 year?

A) ‘Samvat 2077’ indeed served as a booster dose for the Indian economy as it lifted the euphoria further, helping stock markets to scale fresh record highs.

The unlocking mode brought in the most awaited durable revival in the economic activity, which led to a significant recovery in various macro, micro, and high-frequency data points, resulting in the equity markets nearing its lifetime high zone once again ahead of the Diwali celebrations.

The Nifty50 was up almost 53 per cent since last Diwali, while the Nifty Midcap100 outperformed the Nifty50 and is up 79 per cent. The Nifty Smallcap100 is up 84 per cent, while the Nifty Bank remained mostly in line with 63 per cent gains.

Sustenance of the economic recovery throughout the globe may remain a key pivotal for a smooth ride through the new SAMVAT.

Strong global markets can keep the liquidity flow abundant in our system, while domestic events may provide intermittent corrections to add further longs.

Hence, one can expect SAMVAT 2078 to remain fairly vibrant but not as much as compared to 2077, but still, the outperformed pockets would continue to do well.  

Q) What is your call on markets for SAMVAT 2078?

A) The broader structure of the Nifty remains positive until it doesn't register a weekly close below 16070. The level of 16070 marked the kickstart of the euphoric up move despite its already overbought reading; monthly RSI surpassed its prior swing high in the month of August 2021.

The risk of the covid-19 variants is still not completely out of the system which may keep the bears active. From the next 12 months' perspective, our focus remains on unlocking themes, consumption, healthcare, rural-Agri. focused business, digital & telecom along with financials.

We believe another round of fiscal stimulus could help elevate sentiments further. The focus to disinvest stakes in state-run entities & roping in fresh foreign debt inflows to fund investments would keep the liquidity tap active for the govt. to pedal its way through this challenging environment.

We expect the Nifty to scale towards the 20500-20800 zone during the Samvat 2078 itself with some intermittent corrections which would provide timely opportunities to add longs.

Q) Which sectors are likely to lead the next leg of the rally in SAMVAT 2078?

A) We expect sector rotation to remain healthy as our focus remains on Unlock themes, Consumption, Healthcare, Rural-Agri. focused business, Digital, and Telecom, along with Financials.

Q) One big change from the last SAMVAT to this is the additions of retail investors. There are more than 8.5 cr retail investors registered on the BSE. What advise would you like to give them for the next year?

A) Retail investors should focus on their financial goals, and their risk tolerance capacity and devote more time to their asset allocation strategy. ‘Asset Allocation Strategy’ remains an optimal strategy for creating wealth.

At times, even the most seasoned investor becomes puzzled when faced with thousands of stocks, bonds, and mutual funds to select from.

If one fails to do it right, the opportunity lost to accumulate wealth with the right risk can put your future goals off track. So, what's the best course of action? Instead of choosing just stocks, decide what mix of stocks, bonds, and mutual funds you wish to invest in over a period of time.

And this can only be done through a proper ‘asset allocation’ strategy. The primary objective of asset allocation is to reduce volatility while increasing returns.

Diversification supports investors in reducing risk. The procedure involves determining your risk/return profile and then allocating funds into various asset groups in a predetermined proportion.

Q) Any big learnings, which you would like to share with leads, especially Gen Z on how not to lose wealth, especially when things start to go southward?

A) Gen Z is the most dynamic participant within the overall ecosystem of the stock markets across the globe. They are more influenced by the social world and hence most vulnerable. They are more optimistic but impulsive and aggressive at the same time.

The biggest mistake, which they ideally do, is over-committing and not following a stop-loss mechanism when the position hits the reverse gear.

The second mistake, which is common for most retail investors, is trying to ‘Catch a Falling Knife’ in the hope to outsmart the market. Beginners and retail investors should take note of these two common mistakes.  

On the other hand, I have always given more weightage to ‘Self-Discipline’ and said that ‘Discipline’ is your ‘Karna Kavach’. Life around the Indian stock markets has always been chaotic and it will remain so until eternity.

The only way to overcome this chaos, and step into clarity is by putting things in order. This phenomenon of putting things in order comes from the act of exercising ‘Discipline’.

Something which is a part of oneself and practiced in every aspect of one’s daily routine. Extending this practice of self-discipline in market dealings too is a necessity for sustained growth.

It will help you retain your success while overcoming those chaotic phases, which occur every day to put you off track.

Discipline is a habit, and not a skill, and one needs to cultivate this habit over a period of time to attain that mode of orderliness, which helps you build that fence that protects your freedom. Else one can easily become a slave of others’ opinions and actions in the stock markets.

(Disclaimer: The views/suggestions/advice expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)