Weekly Market Recap
It’s been quite a week for the market, where as expected from last week clue, Monday started off with sharp pull back only to close at the low, however, sharper recovery was seen on Tuesday that hasn’t only recoup the Monday’s loss but ended with descent gains. Though nothing much has been done for rest of the week, but still NIFTY managed to regain most of its last week loss if not fully.
In the week gone by the benchmark SENSEX surged by 433 points, or 1.15% to settle at 38040, similarly, NIFTY gained 140 points, or 1.27% and settled at 11214. While BANKNIFTY continued to be laggard with a gain of only half of percent, way below from its last week high.
Current Outlook
There are group of stocks which had been quite resilient in recent pull back and on top of that was metal stocks followed by Auto’s. They continued to rise till the end of this week and leaving an impression to gain further in coming week. Gold and Silver prices have had a ballistic move on the back of stimuli announced by the central banker globally, and now stimuli effect is more visible on other commodity prices as well like base metal which may led to the fast recovery in metal stocks. How long that move last or sustain? That question would remain unanswered unless market itself tells. However, history has strong evidence that stimulus package has strong positive impact on the commodity prices from precious metals to base metals. Furthermore, metal stocks are appeared to be best configured technically as no indicator is evincing bifurcation, that’s a strong sign.
However, financials remain the weakest spot in the market that gained the least post recent correction. While they are participating aggressively on pull-back, but not a vice-a versa. Unequivocally, their standoffishness behaviour is ostensibly a cause of concern at least for the indices given their weightage. Since, the market plunged in March and recovered precipitously thereafter, financials have been a clear-cut laggard. It looks like they would continue to underperform the overall market with a greater degree of margin. Ipso facto, relatively not a great space to be in.
Since, past few weeks I have been emphasizing to focus on relatively stronger stock in strong sector who is providing a descent entry with close exit. I think, the strong or expensive stock may continue to become dearer for some more time unless complacency brought back in vehemently. Hence, outlook for individual stocks is still positive.
Conclusion
Unimpeachably, market is lopsided and demonstrating a challenging investment landscape, where the only clues we have are prices rising gradually, despite there is little helping us with the words of encouragement on the news flow. Though some ballistic surges in few of the stocks have amped up speculation, however, as of now that is the only space to stay invested with tight stop unless proven otherwise.