MD, Kotak Mutual Fund
Investors have to follow their dharma of asset allocation. One can gradually start adding to equity positions. The Street is estimating that EPS (earnings per share) for the Nifty will be ₹850 in FY23 . At historic average PE (price to earnings) ratio, the fair value of the market comes to about 15,800. So, we are now at the historical average valuation. That said, this is not the market for leverage or trading without strict stop losses.
Head- technicals and derivatives, Axis Securities
On short-term chart, all three indices – Nifty, Midcap and Smallcap are in oversold zone. Most of the stocks have witnessed capitulation in the recent past which indicates there might be a chance of pullback from current levels.
However, if the Nifty and the Midcap index break below the March 22 low then they may continue their downward journey and we may witness another 3-4% correction in the coming weeks.
If the Nifty manages to hold 15,670 -15,600 level, then there is high probability of a pullback towards 15,950-16,100 levels. The overall trend is bearish for all three indices, so sell on rallies would be the strategy.
Head of equity strategy- broking and distribution, Motilal Oswal
The market looks oversold, but that does not mean you will see a big bounce because we have seen in the past that at a certain point the market just pauses for a while but cannot sustain the pullback. Large-caps are looking attractive valuation wise and from a risk-reward point of view. We see lot of value in banks, IT, oil & gas and auto stocks. Nifty earnings growth has been good at 26% and a bounce-back is due but the direction will depend on how long FPIs keep selling.
Independent market advisor
Markets are oversold but they can become more oversold before they see any bounce-back. It is true across the board as quite a lot of value has been lost in the last few weeks. We can’t say if the correction has played out entirely. Investors who did not encash at higher levels need to stay put. Those who have cash can wait for a few weeks. When correction nears its end, auto, financials and capital goods stocks can be bought into.
The broad market is in a free-fall and some technical indicators may appear oversold but that is no reason to jump into the market. The Smallcap index has broken the March 2022 low and the Midcap index is close to doing so. Nifty and Bank Nifty could be next. Investors looking to invest should wait for the dust to settle and even then focus on defensive sectors like pharma till we can clearly say that the bear market is over. But for now, cash is king.
VP-technicals, Religare Broking
If the Nifty fails to hold around the previous swing low, then we would soon see 15,400 levels. While the Midcap index structure looks similar to the benchmark and may see some respite with the rebound in the benchmark, the situation seems bleak on the small-cap front. We recommend maintaining extra caution while choosing stocks from the broader basket. One can consider nibbling selectively into the IT, FMCG, auto counters; while metals, banking and energy may continue to witness selling pressure on every rise.