Amid volatile crude oil, election environment and the backdrop of FII as net sellers, Indian equity market is seeing the most nervous time. The fierce sell off that continues in midcap and smallcap looks frightening at this stage. Around 80-85 percent stocks fell 30 to 75 percent from their recent highs and portfolio of investors are also 50 percent down while Nifty is trading at the same range with help of few stocks.
We strongly believe that this is the time when we think about our capital protection but history tells us differently. Historical data suggest that those who bought quality shares in 6 months period before election results were announced got huge profit in next one year. So this is the time when you should apply bottom fishing strategy with capital protection approach. One should invest in 4-5 parts till election results’ are announced.
Nifty has strong support at 10,620-10,535 levels and resistance at 10,815-10,940 levels.