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Thursday, 17 June 2021

How are the markets positioned? ~ Post by Hitesh Patel

This blog has been penned by Dr Hitesh Patel. Hitesh & Abhishek work together for Intelsense Hitpicks Advisory.

Greetings to all our friends and hope everyone is keeping good health in these trying times.  

The markets continue in the strong rallying mode we have been witnessing for the past many months.   Many of us have seen such strong rallies on few occasions during our investing lives.   And that too in the face of unbelievable ground realities. This rally now seems to have crossed the wall of worry and minor deterrents like minor negative news flows do not affect this rally.

Most investors continue to have the question of how long this rally is going to last.   Well, it’s difficult to predict a market top or a bottom. But it’s quite possible to know the trend of the market and we can confidently say that the current trend of the market across most time frames. 

This rally remains a broad-based rally with some hints of sector rotation.  A sector or a few sectors continue to outperform while others that have run-up in the past undergo consolidation.  This is characteristic of a strong bull market rally. 

Our feel regarding the sectors likely to gain in the short to medium term largely revolves around the "Unlock theme".  Sectors that have been badly affected by Covid will now endeavour to get out of the woods and might attract investor attention.  Sectors like hospitality, leisure, tours and travels, retailers etc. should be kept in focus. 

Another segment of the market that seems interesting at the current juncture is the banking and NBFC space.   Though NPA worries remain, the uncertainty related to NPA classification and Supreme Court judgment on that aspect as well as on other things like interest on interest etc now seems to be out of the way. 

The perennial favourite and structural stories will continue to do well.  Sectors like pharma, agrochem, speciality chemicals, etc. should continue to show steady moves.

Some long-neglected sectors like power, real estate, PSU, infrastructure etc seem to be showing good relative strength in the market.  These sectors too look interesting.

How long this rally will last is not a question we worry about too much mainly because nobody including us has any correct answer to this question.  So as long as the trend remains up we will continue to maintain our bullish stance.  Our strategy at HITPICKS will continue to focus on fundamentally good companies with strong technical setups.   We will continue to maintain our stance of keeping 8-10 open positions at any given point of time so that subscribers can allocate a decent percentage of their technofunda portfolios to these names.

Kindly get back to us regarding any feedback you want to share with us.


Dr Hitesh Patel 

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