Expectation of new highs can't be ruled out

The period October 21-28 saw markets fall on four of the six trading sessions and gain on just two of the trading sessions. Expiry day was a wash out with markets falling very sharply. BSESENSEX lost 1,275.26 points or 2.29 per cent to close at 59,984.70 points while NIFTY lost 409.33 points or 2.13 per cent to close at 17,857.27 points. Expiry for October turned out to be very messy and was a damp squib with massive losses recorded on Expiry Day.

NIFTY lost a massive 353.70 points on expiry day and managed to close with series gain only because of gains made during the week onMonday and Tuesday. The series gain was 238.62 points or 1.33 per cent. This is one of the lowest in quite a few months.

The guerrilla warfare adopted by bears continued to pay them rich dividends and they extended to cover more stocks as the period progressed. This time they added stocks from the Fand O segment as well. They included stocks like India Mart, Affle India and Easy Trip Planners. Many of these shares have listed in the recent past and had seen a huge run up as well. The IPO market seems to have entered a definitive stage with 5 IPO's planned in the next five days and the mother of all IPO's Paytm hitting the market on November 8 immediately after Diwali break. Of these six IPO's, four are from the fintech space and two companies are bricks and mortar story. I strongly believe that the overall performance off these six IPO's may leave a sour taste in the mouth of investors post listing. Further, it may kill the appetite of new issues as well. More of IPO's as we discuss each issue separately in the coming days. The period from October 29 to November 3 is a short four-day period as markets would be closed for Diwali on November 4 and 5. There will of course be the short one-hour Muhurat trading on Thursday. The losses suffered this week have been severe and at best we could see some consolidation in the coming week.

The expectation of new highs cannot be ruled out at this time, however the possibility of that happening in the immediate future is certainly ruled out. The strategy for the coming period would continue to buy on strong dips and sell on rallies. Trading opportunities would arise and present themselves in plenty. Corporate results being announced are by and large good and that is the only saving grace at this time.

(The author is the founder of Kejriwal Research and Investment Services, an advisory firm)