Another down day for NIFTY. 4% of NSE stocks are now at monthly highs and 32% are at monthly lows. So the situation is fast approaching oversold condition from where an intermediate term rally can emerge. To give you a perspective of how oversold it can get, here are the levels to which monthly lows had dropped on previous pullbacks/corrections:
| Pullback/Correction Date | % of NSE Stocks at monthly lows |
| Mid Jan 2006 | 16% |
| End Dec 2005 | 21% |
| Mid-End Oct 2005 | 62% |
So in this current pullback/consolidation the NIFTY has not declined a lot but the stocks in general have declined significantly, especially the broad market. NIFTY stoks have not corrected too much, if they had corrected significantly then we would have seen much lower levels on NIFTY. Another few days of correction in the broad market and stocks can approach very oversold levels.Let us see. No picks for today, I will be waiting to see what happens in the next 2-3 days and then decide on initiating positions.
