Actionable Insights (27th May'24) : Keep some cash / funds (~10% of your portfolio value) ready for buying opportunity on or after 4th June (Election Results).

In our opinion, Nifty may fall 5-10% in next 30 days!!!

👉 Best Case Scenario: Existing government / alliance (NDA) comes back to power with ~350+ seats, in such scenario market will cheer up and Nifty might jump 5-6% close to Nifty 24,500 levels from 23K now (here, again we will see only Index stocks i.e., large caps going up not the small/mid-caps). Market sentiment will be at it's peak and in next few days post results we will witness massive profit booking across board which will bring down Nifty at least 10% from it's peak achieved after the election result. So, net-net we will be down around 4-6% (Nifty 21,800) from current Nifty levels in next 1-2 weeks post election results.

👉 Average Case Scenario: Existing government / alliance is able to win close to 270-300 in total seats. Well, they will be able to form the government but market will not cheer-up and we will see gradual decline over the next 1-2 weeks. Nifty will fall 4-6% from within few days post the result announcement.

👉 Worst Case Scenario: NDA fail to win majority and INDI alliance forming the government. In such scenarios we will see 2 circuit down (~5% each) in the market i.e. total 10% drop in a day or even 15% drop in next couple of days. Some narrative will float and market will start recovering gradually and settle down 8-10% below the closing level of pre election day. This is un-likely but anything can happen & predicting election result is close to impossible.

👉 So, what we are seeing here is, in all the scenarios, Nifty will fall 5-10%. If you closely monitor, small & mid-caps has already started falling from last 4-5 days (profit booking or gradual decline visible in this segment which has performed well in last 12 months), large caps are rising just to create "feel good factor" because they have not performed since long (~ 12 months) and may be money will feel safe being in large cap rather than mid or small caps.

👉 Market showing all signs of weakness, but you must stay invested and be ready with cash in hand to grab this opportunity ahead. Remember that, bull run which started from mid 2020 (1st phase of this capex cycle bull run started from mid 2020 till Jan'22 ~ 18 months and 2nd phase started from Apr'23 which is ongoing) will continue till mid 2026 or even beyond this. Economic cycle will continue till 2028-2030, but the stock market will make a peak sometime in 2026 or somewhere close by. Since, this is capex cycle bull run, we are witnessing rally in infra, capital goods, industrials, real estate, manufacturing, auto, green energy like solar, wind etc. Secular growth stories like consumption, financials, pharma & IT will participate but a bit slow.

👉 In our opinion, June 4th 2024 will also be a time for sector rotation. And we will see 3 key sectors in huge demand 1) Manufacturing & Automobile 2) Infrastructure 3) Renewable i.e., Solar rally will continue.

✍️ Looking at the volatile market ahead, we have decided to push all our stock recommendations from various packages (Super 6 Plan, Mentoring Program, SME Plan) for the month of May'24 to Jun'24. Kindly make a note of this.

Note: Remember that, no one can predict the market trends or time the market with accuracy. We have expressed our opinion and we deserve to be proven wrong.

Happy Investing!!!

~ Team 3C Capitals