Weekly Markey Recap
Last week I ended up on a cautious note and this week seems like the market has changed its stance from bear to bull, whether it’s a frequent rotation of stance or embezzlement only time will tell. So far, the market has been quite resilient and ended on a strong note.
In the week gone by the benchmark SENSEX gained 630 points, or 1.02% to climb to 62293, similarly, NIFTY has added 205 points, or 1.12% to reach 18512. BANKNIFTY settled at an all-time high with a gain of 1.29%.
Current Outlook
The technology stocks which have been the laggard or side-ways for quite some post-deep correction seem to have resuscitated this week by outperforming the overall market. While defensives and financials are still performing well, Industrials are also leading the way. BANKNIFTY is already at an all-time high and inching higher, if technology continues to support then NIFTY will have a long way to go. However, declining volume and not-so-strong market breadth are still a concern. Now, negative divergence among indicators with respect to price is adding perplexity to the configuration.
Whereas VIX continues to alleviate and reached 13.33, the lowest level in the past year which is good for bulls, however, it is quite surprising to see these levels before the state elections. Perhaps, the market knows the outcome or won’t react negatively to any kind of outcome. It is arduous to anticipate but the subject to ruminate.
Most importantly, presently price action is quite bullish which is the top-most ingredient for analysis, and that is very much in favor of bulls.
Conclusion
There are times when other internals like volume, breadth, indicators, and macroeconomic factors doesn’t seem to support the higher prices, but it happens. This ambiguity eventually gets resolved either by improvement in these factors later or by a sharp pull-back in price. We need to wait patiently and let the market provide decent entry, surely it will.
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Be Patient; Be a Savvy Investor..!!
Pankaj