Weekly Market Recap
It has been quite a volatile week for the market as we have witnessed a wild swing among the indices. In the first half of the week, NIFTY posted a significant correction but recovered sharply in the second half to reach an all-time high. Finally, NIFTY broke out to new highs after two months of consolidation in a dramatic fashion.
In the week gone by the benchmark SENSEX surged to 73745 by adding 602 points or .82%, similarly, NIFTY gained 126 points, or .57% to close at 22338. And BANKNIFTY gained over 1%.
Current Outlook
Since the past few weeks, we have been experiencing a rapid ebb and flow pattern among the prices as the prices are reversing sharply from the crucial level despite breaking the support and resistance. For instance, NIFTY revered sharply early this week after recording an all-time high reading, not only that in fact market fell with heavy volume along with quite weak breadth. However, we saw a dramatic shift in price along with volume and breadth later this week.
Based on recent price behavior it’s arduous to anticipate when this long secular bull market will stop, as long as prices are rising, they may continue to do so for quite some time. Technically, the breakout above the consolidation should act as a support, falling below that level may again invite a wild swing or a sharp correction.
As of now, bulls are in charge and fully dominating the prices and leaving a strong impression that it’s a buy-on-dips market. Therefore, it’s prudent to follow the trend, sometimes overstretched move doesn’t seem to be rational, but this happens in the stock market. During those times, one can observe and analyze the market from the outside rather than capturing every move.
Conclusion
Though the uptrend appears to be quite intact, it is important to consider the recent early week correction that the price may fall quite sharply without giving a sign of warning. Hence, always be prepared for the exit, it is possible we may have to re-enter into the same position if the trend is re-established, but once the exit call is triggered, we should exit immediately.
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Be Disciplined; Be a Savvy Investor..!!
Pankaj