2024 Market Forecast: Trends, Strategies, and A Forward-Looking Perspective on 2024

From the title it should be obvious that this is a forward looking write up. Once in a while I do engage in that! Since this concerns the future, the standard caveats would apply- that this is all probabilistic and nothing therefore is to be taken as being deterministic.

To forecast the future, one has to necessarily rely on the past. Where we shall go tomorrow depends a lot on what we have done in the past and what we are doing today.

The market has kept up a good uptrend in 2023 and that kind of ended its flurry when 2024 started. Even as we kept poking higher to create new levels, the moves remained largely an overlapped advance- which is a polite way of saying that it was all mostly consolidation. But did anyone really mind? Some did, especially when the markets dived a bit in March. Portfolio values got eroded there and nothing hurts more than the worth of your holdings going down- especially since you have been used to seeing them go up over a year or two.

Readers may have seen my Annual Forecast for 2024 (published in our letters as well in the NDTV Profit digital edition weekly letters that I write). It has been reasonably accurate so far- catching the lows in March and opining for an upward action from there, providing for a sharp dip in May-June as well. That dip did come- and it was nice and sharp too (June 4th) but lasted just a day, did enough damage while it was on (with Nifty almost hitting the lower circuit that day).

My map for rest of 2024 has a projection higher until the end of the year. I do believe that this forecast too turns up positive. The situation around the market seems favorable for it to happen. In fact, like I wrote elsewhere recently, this market is priced to go down but is NOT ready for an upside melt up! The June 4th debacle can be taken as the NEW INFLECTION POINT of the market. I seriously doubt whether the low of that date (21265) is going to be broken in the balance of the year. So all stoplosses can be worked below this date’s lows, perhaps even for a lot of stocks.

Higher target forecasts are coming up slowly but my 2024 forecast had already shown that we should be finishing well above the June lows. While a higher target forecast is useful, it is not mandatory so long as the pathway seems clear. And that is the good thing about 2024 trends. Except for the disturbance in the middle of the year, the forecast is for a good year. So far, that has been flowing out nicely and I see no reason to doubt the projection for the rest of the year.

Modi 3.0 should be a lot more focused on creating positive trends for the country. This is what the market will be looking for. The FIIs are all set to make a comeback. Not only shall they buy from the open market but they are also getting a good supply from Promoter paper that whet their appetite for large blocks. We have a good scenario on hand where Indian promoters are realising the value of market capital and the need for marquee investors and hence anxious to tap into this resource. At the same time, the FIIs too are realising that Indian market story is not about to reverse in any hurry and are happy to lap up goods on offer. In addition, the local SIP flows have been tasting blood continuously and appear game for more. Finally, the addition of India to the JPM Bond basket will spin out fresh dominoes of its own.

Undoubtedly, the developments on the ground are matching the promises held out in the charts. When this happens, the market often responds magnificently. So, be prepared for strong advances even from here!

There shall be periodic hiccups of course- which market is devoid of that? Nay sayers will always be around. It is our job to stay clear of them and use all dips to add to positions. Equity is going to remain the best asset class and there are many market real experts who have this firm opinion that we haven’t seen anything yet! Ridham Desai of Morgan Stanley called it as possibly the biggest bull market of them all yet!

We will be able to participate and gain from such a scenario only if we prepare the mind to be ready for something not seen yet. So, lets all try and do that. It is an important element for succeeding in the market ahead. Next is to invest actively and perhaps even aggressively. It is time to increase allocations to equities.

Further, while bull markets demand that we remain invested (i.e. time in the market), I would also warn that the advent and penetration of technology will change the way cycles play out into the future. Hence along with “Time In”, I would also urge everyone to incorporate a “Timing” the market. Cycles shortening will impart a different texture to how stock prices shall perform and a rapidly shifting wave across markets will make just buy and hold strategy a non-viable one in terms of maximising returns. I know a lot of people have problems with timing the market but if they do wish to increase their returns substantially, this is a skill they will have to learn. If they cannot, they may consider entrusting their money to those that can.

We are Neotrader and we specialise in market timing. You could consider getting in touch with us to discuss the same if you so wish.

The rest of 2024 and out into 2025-26 is going to be a very interesting, profitable and dynamic time for the markets. Be sure you are ready for it.

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