Climbing to New Heights: A Comprehensive Analysis of the Indian Stock Market's Recent Surge
The market hits an all-time high. I would like to make one observation. In the NSE, the declining stocks were higher than the advancing ones. On Wednesday, 1013 stocks advanced while 1041 stocks declined. This happened despite FIIs making a heavy purchase of Rs 12350 crore on Wednesday.
It clearly shows that we should be cautious in our purchases; however, we shouldn't sell fundamentally strong stocks that we own; they may correct a bit in cases of market volatility, but it's an opportunity to buy them at a discount. The market may not sink today just because it has become expensive. It's just an observation. The broader market was weak, and the small and midcaps are yet to touch the ATH.
CLSA cautioned about India's exceedingly rich valuations and optimistic EPS projections. Probably, the valuations have turned high owing to Fil's rush to buy Indian shares.
In my opinion, we may shop around at undervalued banks and select pharmaceutical companies. They are looking good for the long term, and we have already revealed the names to you.
On the basis of order flow and market structure, Adani Total and Adani Enterprises look good. The other companies on the basis of order flow include Atul Ltd. @ Rs. 6946, Auto Line @Rs. 69.10, Bosch @ Rs.18689, BSE @ Rs. 614.75, Capacite Infra Projects @ Rs. 204, Sakthi Pump @ Rs. 592.
The above stocks should not be bought randomly. They should be studied in detail before committing any money. They are based on market structure and order flow, which means they are short-term picks and should be exited at a higher price, as well as a stop-loss placed in order to protect the capital. In my opinion, few of us can be good at short-term timing and execution. That's how the market works, and we should accept this fact. If you want to win the market, you need to improve your skill set. If we agree with the other folks (media gurus), it means we don't have any edge. Let's understand the reality and learn to have an edge, or at least remind ourselves that short-term gains are based on specialisation and edge. If we lose, we can't blame others but realise that we should learn to sharpen our skills.
Coming back to the US, the country's GDP growth was revised to an excellent 2%. The country, which was supposed to be in recession, has witnessed a huge revision in growth. Right now, everyone is celebrating the US market, and it's time to be cautious. We timed our entry and made several entries in the US, like NVDA M5FT, Google, and many more. Some of them have gained 300% in the short term. Even our recent entries like LYFT and Uber have gone up by 10%. Right now, I would allow things to cool. The US market is closed on July 4 owing to Independence Day. It's time for a celebration, and I have taken out about 20–30% cash from the market.