“The Nifty rally hauled daily and weekly stochastic oscillator in overbought conditions, indicating minor profit booking in recently run up stocks can not be ruled out. Thus, dips should be utilised to accumulate quality stocks as strong support for the Nifty is placed at 19500,” said Dharmesh Shah, research analyst at ICICI Drect Research.
The Nifty midcap index scaled to fresh lifetime high while small cap index is still 5% away from its all time high.
the quarterly perspective, flows in India were almost thrice than the nearest competitor. The same is reflected in terms of performance where Nifty was able to scale fresh life highs while rest of the markets are still languishing.
Avoid lumpsum investments
“Indian equity markets have rallied sharply in last 3-4 months to scale fresh all-time high levels. Investors should avoid the temptation of booking profit as outlook remain positive. Lumpsum investment however should be avoided and deployed at any market correction,” said Sachin Jain, research analyst at ICICI Securities.
Adopt a balanced strategy
Time to reduce the tax liability on long and short-term capital gains
Ajinkya Kulkarni, Co-Founder and CEO, Wint Wealth believes that as Nifty approaches 20,000, the time is ripe to reduce the tax liability on long and short-term capital gains or to book profits for portfolio rebalancing, as per the original allocation.
However, he cautions that retail investors need to plan it well instead of trying to time the market. For instance, someone selling stocks or equity mutual funds for tax harvesting must immediately reinvest in the same stock/fund to avoid price deviations.
“Many investors also try to delay their future equity investments when the market is in a bull phase. Since it is impossible to predict market movements, this approach can seriously hamper their wealth creation. Instead, they should continue with their SIPs while holding onto any significant lumpsum investments,” said Kulkarni.
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The current market conditions appear to be more favorable for buy-and-hold traders rather than day traders
Chasing after a rapid upward movement can be challenging, as it may lead to missed opportunities or increased risk. However, it is important to maintain a bullish perspective as we are currently in a long-term structural bull market. In such a market, every dip or consolidation can be seen as a potential buying opportunity. Investors with a long-term outlook should consider utilizing these moments of temporary price declines to accumulate positions in stocks or other assets they believe in,” said Santosh Meena, Head of Research, Swastika Investmart Ltd.
Remain invested and focus on sectors that can benefit from government’s capex plans
Despite the market reaching all-time highs, retail participation remains relatively low, with general market sentiment expecting a market correction before opting for a re-entry.
“From a technical standpoint, India has broken out of a long-term consolidation phase that initiated in late 2021. Our technical desk predicts that the cup and handle pattern breakout that has happened on Nifty may propel it to 22K levels in the near future. It’s essential for investors to bear in mind that markets tend to anticipate future developments rather than merely reflecting the current scenario, which might appear somewhat pessimistic on the ground,’ said Anirudh Garg, Partner and Head of Research at Invasset PMS.
You could also book part profits
Kedar Kadam, Director – Listed Investments, Waterfield Advisors believes getting rid of long-stuck positions in the portfolio and moving to quality stocks should be a priority at these levels.
“For existing investments, if one’s equity exposure is higher than the long-term allocation number, you could consider reducing it and bringing it in line. If your equity exposure is lower than your long-term allocation by less than 10%, it is best to stay put and if additional funds are available, invest in a staggered manner over the next six months, ” said Vivek Banka, Co-Founder, GoalTeller, an automated financial planning platform.
Banka further said that if equity exposure is lower by more than 10%, it is time to bring the exposure back over the next three months in a staggered manner.