The markets are at an oversold juncture and can potentially be at a turning point. While the weakness continues to dominate market trends, there is a chance for a reversal in the short term, according to CK Narayan, founder of NeoTrader.
"We do have a potential for a price and time match today, with prices reaching support levels. There's a chance that we are at a turning point as we speak," Narayan told NDTV Profit.
However, he cautioned that while part A of the process is in place, part B the emergence of a reversal pattern on the charts — is still awaited. "What we now require is for a reversal pattern to exhibit on the chart, which is still not visible today."
Narayan highlighted that the entire market, including broader indices and the Nifty, is currently oversold. "If there is a pullback, the whole market will improve. What is lacking today is any kind of tailwind to the upside," he explained, emphasising that indices like the NSE Nifty 50 and Nifty Bank would need to prove strength first, which could then lead the way for small and mid-cap stocks to recover.
He addressed the ongoing quest to identify the market bottom, saying, "Weakness begets weakness is a standard cliché of the market. Everyone is searching for that elusive bottom and, eventually, someone will get it right. When and where is the question."
The benchmark NSE Nifty 50 and the 30-stock Sensex fell as much as 1.15% and 1.11% on Monday, taking the fall to over 13% for both indices since their September peak. The deepening selloff in local stocks comes ahead of key macroeconomic events like the US Federal Rate decision and the Indian budget. Disappointing quarterly earnings and the looming risk of further downgrades continue to weigh on investor sentiment.
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