After a decent rally in November and December, the market has started to show some curious data points. Let’s look at some internals of this month:
What does this mean?
Well for someone who is a believer in classical patterns, this is as good an indicator of distribution as any.
What is distribution?
Where the benchmark index looks quite good (Even if helped by just 2-3 stocks) but beneath the surface, the smart money is busy distributing midcap holdings at a good price while they still can.
Normally, these phases, if not broken soon, lead to a significant market correction. All you need is a trigger. And what could that trigger be? We don’t know that yet but it would pay to be a bit cautious on the market once again and not get too adventurous.
The risk of this thesis being wrong is always there. In case the Nifty breaks 11,000 convincingly and more stocks start to participate in the rally with volumes, I will reverse my call but till then, this remains my base case.
Anuj Singhal is the stocks market editor at CNBC-TV18.
First Published: Jan 22, 2019 9:53 AM IST
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
Lok Sabha Elections 2024 | How critical is Phase-5 for both NDA and I.N.D.I.A
May 20, 2024 7:30 AM
Lok Sabha Election Phase 5 Voting Live Updates: Leaders, actors among early voters as 49 seats poll today
May 20, 2024 6:34 AM