Time to book profits from Equity market

After the rate hike from RBI, market has started going down once again. As I said in my earlier blog, it’s a time to book profits from Equity markets and park your funds in debt instruments where capital is safe. This week Sensex has broken a major support of 18975 (Corresponding levels in Nifty – 5700), now the first support will come around 17800 (5350).

If you have missed the train you will get a chance to ride the trend once again. Next week if sensex comes around 18800 (5600) then one can go short with a Stop loss above 19300(5750). As I mentioned in my previous blog , this C wave of A-B-C correction. A wave was 21200 to 7700, B wave was 7700 to 21108 and C wave has started now which may take sensex to 12500-13000.

As mentioned in the chart “e” wave has started and this wave can be a very destructive one. This wave can be 161.8% to 261.8% of “a” i.e. 16000 / 14200 or 100% of “c” i.e. 16300.

Following sectors looking weak

Real Estate, Telecom, Capital Goods, Power

We may see profit booking in following sectors

Metals , IT, Banking ( If Tata Steel goes below 575, it can go down to 500 in 10-15 days)

Following sectors may outperform broader market

Healthcare, FMCG, Auto

To conclude, book profits from equity market and park fund in debt instruments. One can go short in Nifty around 5600 with a Stop loss of 5750 for the target of 5200-4900. Happy Trading!!!!