Start preparing for a buy-on-dips approach: Anand James explains why

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Key Points

One, play for a bounce off 50 DMA, near which we have closed for the last two days..

Traders should prepare for a buy on dips approach, while taking cues from the fact that even a tiresome bear phase that unfolded in Dec 2022, when similar conditions prevailed, lasted only for three months, says Anand James, Chief Market Strategist at Geojit Financial Services..

There is a willingness to push ahead, but there is no sign of euphoria, and most of the recent days have seen lower highs and lower lows, ample evidence of declining trend in play..

Further, the ratio of 50 to 200 DMA is at similar levels as in December 2022, post which a painful bear phase followed..

Couple of days of Dojis and positive closes did give a whiff of positivity, but they were not sufficient to signal a reversal, letting the prevailing downtrend aim for 42780, which is another 1000 points down..

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