Are we near the bottom or yet to make new low?

Many after covid investors are panicking because for the first time they have seen time correction & price correction both. Even in 2020 market crash, Nifty fell badly with fast downmove & moved up quickly by making bottom at 7500.

How this fall is different from previous falls ? We don’t have any global event to worry about. We don’t have financial crisis or scam that can push the markets down. Then why are we falling ?? It’s just the valuation correction. FII’s started booking thier profits & reinvesting that money in some other parts of the world where they are seeing value buys.

What’s the biggest mistake retail investors who enter post covid did ? Not having enough cash to deploy. Even smart investors with some cash bought the dip for every 1-2% fall thinking that it is the bottom & left with empty hands right now. Those who enjoyed in September & October by seeing notional profits in their portfolios are crying right now with the regret.

Forget about the past, what’s the best thing that you can do right now?

Get courage to hold your portfolios & mutual funds if you don’t have any cash left.
Don’t stop your SIP’s, at least don’t redeem & sell your funds right now, that will be your biggest regret.
If you have cash, don’t do bulk buying right now in stocks or mutual funds, slowly try to accumulate your positions because no one knows the exact bottom.
If you are on 100% cash, you can invest 40%-60% right now & rest add on dips.

How is Nifty Looking?

Reliance & IT is dragging the Nifty badly. CMP of Nifty is 22100. Nifty can touch 19k in worst case if something really bad happens. So, downside risk is just 2k-3k points from here but in that fall stocks can move 20-30% in the same interval.

Will Nifty recover & bounce back quickly from here ?? No, it will not happen because we did not fall due to bad news we have fallen because our results are bad & valuations are at peak. Something significant has to happen if we need strong bounce back from here & touch all time high in short span.

We will hover here for a while & consolidate a bit more before the next rally. That’s good for market too because it should form good base before moving up which provides real sustainable strength for index.

Tomorrow is a big day in US related to Trump Tarrif decisions which can trigger the market on either side. Keep an eye.

Beginners can continue thier SIP
Little knowledgeable people can try accumulating or building positions for each 1000 points fall in Nifty.
Pros can play with futures with proper hedging.

Banknifty Take:

Bank Nifty is looking more stronger when compared to Nifty because stocks valuations are too good to ignore. Banks & NBFCs may lead the next bull rally. Cherry pick your favourite stocks & ride once you start seeing instituational foot prints.

If you are sitting with individual stocks right now, it’s your take whether you want to exit or wait. It depends on many things like result of the company, market cap of the company and the theme in which you have invested.

Different asset classes summary:

Silver has some downside left, looking super good for long term investors
Gold is topped out, upside potential is very less, there is possibility of moving money from Gold to equities once dust settles in the US.
Bitcon formed a good wick indicating bullish momentum.
Small and midcaps are still not looking so much attractive with respect to valuations.
Private banks like Kotak, HDFC and others look super attractive.
Laggards like SBI cards, Bajaj finance started moving which did not move anything in last 4 years.
All famous twitter stocks corrected 30-40% but still look overvalued right now.
Even if Nifty reclaims all time high, every stock will not move to all time high.

I am not SEBI registered analyst. My views might be biased. Please consult your financial advisor before investing.