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[Must Read] Markets will Correct ๐Ÿ“‰

- Central Banks have almost achieved their objective of controlling inflation through tightened monetary policy. Though the CPI is inching lower, asset inflation is resurfacing through stock prices and real estate. - Many listed companies that came out with the quarterly numbers are nothing good to talk about. Growth and profits are subdued and for small and mid caps the numbers are decimated but the stocks are still trading at a historical premium. - Analysts will once again start downgrading the earnings forecast and that will start the downward momentum. Once again people will undergo the "Flight to Quality" effect. - No of Bankruptcies is steadily increasing - No of Job openings are trending lower - Most of the US listed firms that have borrowed at a lower interest rate in 2021 are coming up for renewals this year. By the time they refinance, they will be doing it at a higher interest rate which will impact their PAT as a result their EPS estimates will take a biting. - Gold looks attractive from a market cycle standpoint. My Recommendation: - Have an emergency fund for at least 6 to 9 months to cover your expenses. - Exit overvalued small and microcaps stocks. Move to a reasonably valued large cap. - Have health insurance for you and your dependents. - Move out of small cap mutual funds and have some allocation to debt funds. Let me know your thoughts. I hope 2025 turns out better.

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Personal Finance on

by steppenwolf

Stealth

Is the Market Offering an Opportunity to Go Long?

A few months ago I wrote about how i caught 100% + returns in the Counter - Inox wind. It has set up again. Here is the link to the Inox wind post. https://share.gvine.app/sugCF7MjAeSSFkvh6 Accumulation has been happening in Inox Wind for the last 6 months, and now it has started to move up with a wide-range upthrust bullish candle and a rise in volume. I wrote in my post that it would absorb all the selling and then move up again. This is a new entry opportunity, and I have doubled my quantity from the last time. This is how we can catch multi baggers by increasing the quantity every time it sets up. I have converted my trading position into an investment now, and I will start reading about the company, and start getting involved beyond charts. This is one example of technicals and fundamentals that can be combined. Even though this is an investment for me, I have a stop loss level ,nothing in the market I do without a stop loss. Here is a link to my last Post. https://share.gvine.app/nFW8z2BvpgCpejMWA I had updated here that I am 65-70% cash and will be deploying money only into sector ETFs like Auto, PSE, CPSE, Midcap 150 and would wait for stability to return for equities. Now Nifty has given an opportunity to go long on Friday. Whatever happened in the last 15 days was a pullback as of today. I have started to build positions in equities now. A lot of things are happening currently in the global scenario, from wars, rate cuts, to US elections. We could be prone to a lot of pullbacks and shakeouts. One should not expect short-term profit kinds of trades to work out. It is entirely possible that we could break the recent low of 23,900 on Nifty, and another down leg can follow. What would I do? I will simply follow my risk management rules and will get out if 23,900 breaks on Nifty and will wait for another opportunity to arise. Sectors where i am keen to build positions are - Nifty Consumption , Nifty service sector ,Nifty Large mid 250. Generally, I scale positions in two ways: one time scale-in or 50-50% after each confirmation. The market currently is not conducive for a one-time scale-in. I will explain this with a recent example. I got into ICICIGI on Friday around 2010. I entered this with the pullback framework that I follow. Initially I got in with 50% only, and after a mini pullback on the hourly TF, I entered again today around 2015, and now I am fully scaled in. I will cut 50% if it breaches 1990 with a wide-range bearish candle with volume expansion and will cut another 50% after the breach of 1930. As the price keeps going up, my stop losses will keep moving up. If the stock moves 7% or more, Iโ€™ll make my risk zero, meaning if it reverses from +7%, I will simply cut it out at cost. Why this aggressive approach? I screen 450-500 stocks and then make a watchlist of 30-40 names, and from there, I enter or scale into 10-12 names. I enter one of the strongest stocks in the market, and such stocks generally don't exhibit massive weakness. It is entirely possible that I would cut ICICIGI around 1950-60 and then stock might set up again in a few days, which has happened many times in the past. I would get back in again after confirmation. I am very nimble in building back positions if i am stopped out. I act quickly to get back in, but I am strict about not risking my capital. When I am wrong, I want to be wrong with the smallest of margins, and when I am right, I will just sit and hold, e.g., Inox Wind. Sister stock movement .i.e stocks from sector moving together, is happening in Insurance space. SBI LIFE , ICICIPRULI, ICICIGI are exhibiting strength. I will get into 2 stocks from these 3. Such a sister stock movement increases the probability of trade working in your favour a great deal. A few more names that are in my watchlist and i may enter them. - NAVKARCORP - SBI LIFE , ICICIPRULI (Today) - NAUKRI - RAMRATAN - GODFREYPHILIP (Gave opp yesterday) - ETHOS - SHAILY (Gave opp. on friday, undergoing mini pullback) etc.

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