The offset and crash in the stock market in March 2020 was nothing but an opportunity to stock in! The Sensex registered levels higher than pre-pandemic, and while experts continued to warn of a bubble, it still hasn’t exploded.
However, the market has been looking iffy in the last few weeks. IPOs like PayTM and Nykaa have been underperforming. The market got down from 60,000 to 57,000 points. Nifty 50 is testing 16,000 levels again after 4 months. Rumors of a new variant, foreign investors withdrawing money, and skeptical market sentiment are all good reasons behind its current sluggishness.
While experts had expected it would correct in the short-term, no one saw this coming. This makes one wonder if the bubble is really true and can they still enter the market at such valuations if there is a scope of further decline. Even in a bear market, one needs trading ideas to continually profit.
In this article, we look at some of the best trading ideas which can reap returns in the next year. We are giving you a few short term trading ideas to explore:
Stock up on FMCG:
FMCG is known to perform when the market crashes. We do not mean a shocking return by performance but expect stable returns when all else crashes. Look for under-valued stocks like Hindustan Unilever to pick up for your bear preparations. Expect returns up to 3% from these in the next 4-6 months.
Choose Good Companies:
We know you asked for short-term trading ideas; however, the current state of the market requires us to be rooted in logic. If you are going to start with your investments now, start with companies that have sound financials. Look for IT companies that are moderately priced, like Subex or Kelton Tech.
Be Cautious of Pharma:
Pharmaceuticals have had some good years! While most people now believe they have blown off their steam, companies like Cipla may be in for a ride yet. Not just favored for the long-term, Cipla has a good trading volume currently and bullish markers; investors may be in for a 7-9% outcome.
Banks look good:
The NIFTY bank has undergone significant correction in the last two weeks, and this is an excellent time to venture into banks. You can look for State Bank of India or ICICI if you were looking at shares that are priced under 1000 or if you are expecting more returns, then it would be a good time to go for IndusInd Bank or HDFC Bank, or Kotak Mahindra Bank, which can give you returns up to 13% in the next 3-4 months.
Steer your wheels:
The auto sector has undergone major correction, with stalwarts like Maruti Suzuki dropping 1000 points in the last 1 week. Experts believe Maruti’s improving sales and margins would lead us to a 20-30% growth in the long term. However, for the short term as well, a slight 5% correction would be a good entrance. In the short term, one can expect 5-10% returns.
These were our top 5 recommendations on short-term trading ideas; however, please note that market predictions are subject to changes and volatile fluctuations. The numbers mentioned above in terms of expected timelines and gains may vary.
Experts believe Nifty would be testing lower volumes and support levels in a few weeks if the new Omicron variant is disbursed. That may provide an excellent opportunity for investments. The best strategy for trading would be to pick some choicest stocks which don’t just look good for the short but for the long term.