??SENSEX is ready for resurrection after a dip in the MAHAKUMBH!

WHAT WE CLAIMED? ??

A day before the Maha Kumbh Mela started, we had published this study saying that the index is likely to trade on a negative note during Kumbla.

?WHAT HAPPENED???

The Sensex traded as per our expectations and took a dip along with Smallcaps & Midcaps.

WHAT SHOULD YOU BE EXPECTING???

??We also said that 6 months after the Kumbh Mela ends Sensex tends to deliver positive returns.

??The average 6 month forward returns are 8%.

??We have a few more reasons to believe that Sensex is likely to trade higher from here in the next 6 months

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87% STOCKS ARE IN A BEAR GRIP!??

WHAT HAPPENED???

SENSEX is down only 15% from the highs but 87% of the stocks listed on NSE are trading below their 40-week exponential moving average (EMA).

This is even lower than the levels seen during June 2022 market bottom when 82% stocks were trading below their respective 200 EMAs.

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WHAT WE THINK???

Such low readings usually signal that the majority of the selling pressure is behind us.

Historically, when markets reach such oversold conditions, they tend to bounce back as investors start looking for value-buying opportunities.

?With stocks deeply corrected, even a small change in sentiment could trigger a short to medium term bounce, especially in stocks that have fallen the most.

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927 STOCKS HIT NEW 52 WEEK LOWS!

?? The number of stocks making net new 52-week lows is down to -927.

?? This is one of the lowest levels seen in recent years. This number hit a low of -1006 during Covid.

?? The markets soon recovered after hitting this number. Several stocks hitting new 52 week lows reflects fear and panic selling in the market.

?? In the past, such extreme situations have often marked the final stages of a market correction, followed by a bounce back as selling pressure

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NIFTY PE Ratio currently stands at 19.6 times!??

?The chart highlights that during past market corrections like the 2003 plunge and 2008 crash, lower PE ratios coincided with strong market rebounds subsequently.

?Nifty’s PE Ratio currently stands at 19.6 times. Such valuations offer a good risk reward entry opportunity from a one year perspective.?

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NIFTY VALUATIONS ARE IN A COMFORTABLE ZONE NOW! ?????

?The Nifty 50 PE ratio has cooled off below 20 times which is close to its lower valuation band.

Historical data suggests that whenever the index trades around such valuation levels, the average 1-year forward returns have been 17.85%.

Lower valuations not only provide a cushion against further downside but also attract institutional flows once risk appetite improves.

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WORST LOSING STREAK EVER IN NIFTY!??

On 3rd March Nifty ended on a negative note for 10 consecutive sessions.

February was the worst negative month ever for Nifty.

Out of 20 trading sessions it closed in the red in 18 sessions. That’s a negative closing 90% of the times.

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A BOUNCE BACK IS DUE!??

We ran a backtest to check what happens one month after the index closes for 8 or more consecutive negative sessions.

Since 2002 there were nine instances of eight or more days of consecutive negative closing. The index closed on a positive note one month later in six out of these nine instances.

?The average one month forward returns was 2.68%.?

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NIFTY IS TRADING NEAR BOTTOM END OF THE RANGE!??

?At the beginning of the year we said that NIFTY is likely to trade in a broad range of

?? 26,277 which was the all time high

?? 21,281 which is the election results day low.

These two levels are emotionally and psychologically important for market participants and is likely to act as major hurdles for bulls as well as bears.

The index is currently trading near the lower end of this range and any dip towards 21,281 is likely to attract buying by market participants.

Thus, the downside from here is limited while upside is far bigger.

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KEY TAKEAWAYS!??

?“Be greedy when everyone else is fearful” - Warren Buffet

??? The level of fear is highest amongst market participants as seen in the various data points presented

?? Nobody knows when the exact bottoms will be made but one thing is certain good opportunities and good news never come together. If you wait for good news you wont get good prices.

?? Right now prices are good but the news is unnerving. You never know when President Trump or any of his counterparts can set the markets on a tailspin with a tweet.

?? It is important to carefully curate a basket of stocks which will have limited impact from any of the global turmoil.

THE SOLUTION WE OFFER!??

We have curated a basket of 10 stocks that we call the Tariff Proof Portfolio which has extremely low impact of the tariff tantrums that US and other countries are a part of.

We believe that these 10 stocks have potential to generate solid triple digit returns over the next three years.

?You will find a readymade basket of these 10 stocks on our new Samco App here -> https://tinyurl.com/yc6ws7xh

Name of RA: Apurva Sheth

Disclaimer: Investments in the securities market are subject to market risk. Read all the related documents carefully before investing. This content is for educational purpose only. sam-co.in/6j