CA Rudramurthy on why FII short covering will take market to new highs

CA Rudramurthy BV, MD, Vachana Investments, says “keeping in mind both the past record as well as what we see currently on prices, I feel the low which the market made at around 18,840 will be a very firm bottom and every dip is a buying opportunity. For me, the market will be more stock specific and FIIs are short to the extent of over 87% and this short covering itself will take the markets to further higher levels.”

We have comfortably broken the range of 18,900-19,100 today and are at around 19,200 level. What are you understanding in terms of the charts now? Where do we see it headed from here on?
First of all, if I have to tell you levels on Nifty 18,840, what we just did recently, will be the low for a long time now and I feel the bottom has already been made. All the bad news is already in the price. Now we are getting global market support as well. Historically, 10 out of 11 times from November to the pre-election which is coming somewhere in May-June 2024, the six-month period has always given a rally of about 10% to 30%.

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So, keeping in mind both the past record as well as what we see currently on prices, I feel the low which the market made at around 18,840 will be a very firm bottom and every dip is a buying opportunity.

For me, the market will be more stock specific and FIIs are short to the extent of over 87% and this short covering itself will take the markets to further higher levels. I will be very stock specific and I will be using every dip as a buying opportunity, keeping the recent low of 18,840 as the stop loss.

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