Weekly Market Recap
Well, it was a roller coaster ride for the market this week. In the continuation of last Friday’s sudden plunge, indices started off the week with the weakness but soon regained the upside momentum and claimed a new all-time high. This has been the longest weekly winning streak for the market as both NIFTY and SENSEX have posted the eighth consecutive weekly gain in a row.
In the week gone by the benchmark, SENSEX surged 1032 points, or 1.75 to claim the 60k mark and settled at 60048. Similarly, NIFTY is few points away to claim the 18K mark and gained 268 points, or 1.52% to close at 17853. While BANKNIFTY remained completely flat.
Current Outlook
In the past two weeks, I talked about the price deviation from the moving averages, and it is obvious to see the knee-jerk reaction that we have witnessed recently as the consequence of abnormal deviation. Although the market has regained its upside momentum, things are becoming pernicious in nature the way it’s rising persistently and ostentatiously. Whether the valuations are justified or not remains a question, as long as the money is chasing the stock price, who cares? The major contribution has come from IT stocks, the business growth might be justifying the swashbuckling rise in stock prices, but a huge vertical advance is ideally settled with the untoward outcome.
However, as I wrote last week there are a group of stocks that have been breaking out from multi-year of consolidation and they have huge potential to rise, realty is one sector that has been on my radar for quite some time, and it did quite well this week. While BANKNIFY is at the edge of its previous high if break-out occurs that may further fuel the rally in NIFTY, but we need to wait for the confirmation because so far it has led to the decline in every pullback.
Moreover, VIX has elevated significantly in the past week which is a cause of concern, and perhaps the indication of something untoward is about to happen that reminds us to stay alert. So far, the technical configuration remains the same so as the outlook.
Conclusion
The recent knee-jerk reaction early week made an exhaustion climax, which set the market up for the current rally. Group of individual stocks is demonstrating a breakout condition for huge upside potential, while few appear to be quite vulnerable including large caps. Hence, stock selection and exit discipline are the keys.
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Keep Analysing…; Be a Savvy Investor..!!
Pankaj