BY N PRASHANT CHOWDARY
“Doing nothing is better than being busy doing nothing.”
As a generation of 90’s I used to watch lot of test cricket in early teens, where my favourite cricketer is Rahul Dravid. He is the called the wall in the cricket where is always played defense. I think in 2026 playing defence in Indian stock market is much better than seeking for returns. One year back when I am watching T-20 matches, I observed major ad in the tv are for SIP not the Coca-Cola or car companies or any other goods like in the past. The propaganda of SIP has reached a peak where I feel it that it has become an addiction to Indians like carbohydrates where a flood of money (3 lakh crores) is coming every year. Stock markets run like a sprint not a marathon. Form covid to 2025 markets has given exceptional returns.
Stock markets are all about probabilities and possibilities. As an asset class it has a different behavior pattern, but underlying anchor is the earning growth of the company and its valuations matter. Even though the country GDP is good it may not translate in to earning of the company due to many factors. Investing is all about at what price we brought the share of the company. At present prices are too high form a valuation perceptive.
As the old saying says that cash is the king in difficult times, but many times in asset allocation cash plays an important role. In my probabilities 2026 cash will perform better than any asset class because real estate is approaching the end of 18.6 years cycle, gold has rallied hard in 2025, and stock markets around the world has performed reasonably good irrespective of uncertainties.
Fundamental perceptive on Indian stock market:
Indian stock market is in high valuation due to liquidation flow. Whenever the market capitalization of the stock market has bypassed the GDP of the country, it is subjected to price correction or time correction. The same thing is happing in the USA MARKET and Indian market has a huge correlation with American markets.
| Year | GDP ($ Bn) | Market Cap ($ Bn) | Ratio (%) |
| 2021 | 3167 | 3350.7 | 105.80% |
| 2022 | 3353 | 3493.8 | 104.20% |
| 2023 | 3730 | 4449.4 | 119.30% |
| 2024 | 3912.7 | 5133.6 | 131.20% |
| 2025 | 4340 | 5880.7 | 135.50% |
And history has many examples of this pattern repeating.
| Year | GDP ($ Bn) | Market Cap ($ Bn) | Ratio (%) |
| 2004 | 709.1 | 409.9 | 57.80% |
| 2005 | 820.4 | 561.9 | 87.20% |
| 2006 | 940.3 | 819.9 | 161.20% |
| 2007 | 1216.7 | 1961.3 | 131.20% |
| 2008 | 1224.1 | 689 | 56.30% |
Technical perceptive on the Indian stock market:
Form a technical analysis point of view every candle formation is important. In December 2025 monthly candle formation is the nature of HANGING MAN in technical perspective which has a nature of pull the index down. And nifty has formed a Double top formation with RSI has a huge divergence which means signaling weakening upward momentum and a potential reversal to the downside. Technical analysis should be always be followed by a stop loss. This candlestick pattern and double top formation is valid until nifty does not cross 26340.
Dry powder strategy:
In military strategy, “powder dry” is part of the idiom “keep your powder dry,” which emphasizes the importance of maintaining readiness, conserving resources, and being prepared to act decisively at a crucial moment. I hope applying this strategy is best in 2026.
Thankyou.