Indian Stock Market Expert Urges Caution Amid Underlying Weakness

Indian stock market expert Hrishikesh Yedve advises investors to reduce exposure and take profits due to underlying weakness in the market, citing declining stocks hitting new highs and slowing momentum, despite short-term technical indicators suggesting potential recovery. This description focuses on the primary topic of the article (Indian stock market expert's cautionary advice), the main entity (Hrishikesh Yedve), the context (Indian stock market), and the significant action (advising investors to reduce exposure and take profits). The description also provides objective and relevant details that will help an AI generate an accurate visual representation of the article's content, such as a graph or chart showing the market's performance.

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Indian Stock Market Expert Urges Caution Amid Underlying Weakness

Indian Stock Market Expert Urges Caution Amid Underlying Weakness

As of May 2024, a prominent Indian stock market expert is advising investors to reduce their exposure and take profits off the table, citing underlying weakness in the market. Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Interrmediates Ltd, points to several data points to support his cautionary stance.

Why this matters: The Indian stock market's performance has a significant impact on the country's economy and investor confidence, making it essential to monitor and respond to signs of weakness. A cautious approach can help investors avoid potential losses and make informed decisions in a volatile market.

Yedve highlights the decreasing percentage of NSE stocks hitting new highs and the declining number of stocks trading above their 200-day Exponential Moving Average (EMA) as key indicators of the market's waning strength. These data points suggest a lack of broad-based participation in the market's recent rally and a slowdown in momentum.

Despite the Nifty index experiencing a significant sell-off on Monday, it rapidly recovered, closing the day at 22,104 with a modest gain of 0.22%. The Bank Nifty also ended an eight-day losing run, closing 333 points higher at 47,754. However, the India VIX, a measure of market volatility, jumped by around 11% intraday and ended the trading session at 20%, indicating an overall perception of worry among market participants.

From a technical perspective, Yedve notes that the Nifty found support near the 100-Days Exponential Moving Average (100-DEMA) and formed a hammer candle near the support zone, indicating strength. He expects a pullback towards 22,300 levels if the index sustains above 22,315. Similarly, for the Bank Nifty, Yedve states that the index has respected the support of the 100-Day Exponential Moving Average (100-DEMA) and formed a bullish engulfing candle near the trendline support, suggesting strength.

Despite the technical indicators hinting at a potential short-term recovery, the overall advice from the market expert remains cautious. Yedve recommends that traders look for stock-specific buying opportunities but avoid aggressive positions and keep yesterday's low as a reference level for stop-loss on long positions at the Nifty level.

Sumeet Bagadia, executive director of Choice Broking, recommends buying two intraday stocks on Tuesday, May 14: TEJASNET in cash at Rs 1199.85, with a stop-loss of Rs 1155 and a target of Rs 1288, and HERITGFOOD in cash at Rs 363.05, with a stop-loss of Rs 350 and a target of Rs 388. However, investors are advised to consult with certified experts before making any investment decisions, as the recommendations made by market analysts are not advised by the author, brokerage firm, or Greynium Information Technologies.

As the Indian stock market navigates through a period of underlying weakness, investors are urged to exercise caution and make well-informed decisions. While short-term opportunities may arise, the overall sentiment remains cautious, with experts advising a reduction in exposure and profit-taking.

Key Takeaways

  • Indian stock market expert advises reducing exposure and taking profits due to underlying weakness.
  • NSE stocks hitting new highs and trading above 200-day EMA are decreasing, indicating waning strength.
  • India VIX jumps 11% intraday, indicating market volatility and worry among participants.
  • Technical indicators suggest short-term recovery, but overall advice remains cautious.
  • Investors urged to exercise caution, reduce exposure, and make informed decisions.