From My perspective, the current market conditions are clearly giving insights that retail investors are favoring value buying now especially in IPOs. This shift is especially visible in recent IPOs, where the response has been selective and cautious. The Hyundai IPO, despite the company’s strong brand recognition, failed to attract significant retail interest, leading to a discounted listing and a close with nearly 7% losses on the first day of trading. This outcome indicates that retailers are no longer swayed by brand names alone; instead, they are focusing on valuation metrics and SWOT analysis before making investment decisions.
This shift in investor behavior is also influencing the upcoming Waaree Energies IPO, which is expected to see a premium listing due to more favorable valuation metrics and a stronger overall SWOT profile. Retail investors have become more discerning, seeking companies with better value propositions rather than jumping into IPOs for quick gains.
For those retail investors who are currently stuck in Hyundai’s disappointing IPO, the recommended strategy would be to exit and explore more promising opportunities in the market. With the current environment offering several attractive alternatives, it’s important to reassess positions, especially given the broader market’s ongoing correction.
The market data further highlights the shifting dynamics: FIIs (Foreign Institutional Investors) have been net sellers, pulling out ₹82,479.73 crores from the cash market, while DIIs (Domestic Institutional Investors) have been net buyers, absorbing ₹77,402.11 crores, largely funded by retail money through mutual funds. However, despite DII support, the continuous FII selling is putting considerable downward pressure on the market, particularly in small-cap stocks. Indices like Small 50, 100, and 250 saw dramatic declines, plunging by more than 6% in just two days.
The broader macroeconomic outlook is also concerning. Global growth, especially from China, is slowing, and geopolitical tensions are adding to the uncertainty. India’s decision to hold interest rates reflects the seriousness of the current situation, in contrast to the rosy growth outlook being presented by the government. While policies like the PLI (Production Linked Incentive) and EXIM trade strategies are designed to support the economy, these may not be enough to offset the global headwinds in the short term.
From a technical analysis standpoint, Nifty 50 remains overbought, with an RSI of 70, and it has already corrected by around 7% since the “sell on rise” recommendation. Selling pressure is expected to continue, with Nifty’s RSI likely to drop further into the 60-55 range over the coming weeks. Sectors like realty, metals, energy, and media are also experiencing significant declines, with small-caps leading the sell-off.
Updated Technical Levels for Nifty Intraday 23 Oct 2024, Wednesday.
– Support levels: 24,320 and 24,000
– Resistance levels: 24,510 and 24,585
– Pattern: Bearish Marubozu
– RSI: 33 (Daily), 53 (Weekly)
– View: Continue to sell on rise at key resistance levels and avoid buying on dips for the time being, especially for swing trading. Hedging strategies are advised to mitigate risks during this period of heightened volatility.
In conclusion, retail investors should maintain a cautious stance, focusing on well-researched opportunities that align with current valuations and SWOT metrics. Given the ongoing sell-off, particularly from FIIs, patience is key, and investors should wait for stronger signals before re-entering the market.
Regards,
VLA Ambala, a SEBI-registered Research Analyst,
So, I hope this detailed analysis can serve as a comprehensive guide for you, helping you to make informed decisions about the Hyundai IPO. Would you like to get any IPO or stock review by us? Yes- Drop a comment Ill try to review it for you.
Thanks VLA Ambala – SBEI RA
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