Market Recap:

The week began on positive note and Nifty touched a new high at 10252, but the market on Thursday traded for an hour in the muharat session was weaker than expected, Nifty was down by 64 points, weigh down by banking stocks as they have been persistently facing NPA’s issue since last few quarters. Among private lenders Axis bank was beaten down by more than 10% post earnings, particularly due to high provisioning and fresh escalated NPA’s

The Nifty ended slightly in the red at 10147, down by 20 points in short week gone by, similarly, Sensex down by 244 points, closed at 32389.96. However, banknifty was relatively weaker and lost more than 600 points, closed at 24010.

Current Outlook:

In past few days, I have been asked by few investors and traders, whether the bubble formation is taking place in the market or not? I said, I think we should wait for earnings, and earning season is on full swing now and my answer is, perhaps No. Because, although only few companies have reported their numbers but what I have observed so far is that market is fairly dealing with good earnings and bad earnings. Companies with good set of numbers have been rewarded by increase in the share price, whereas, companies with bad earnings were not given any chance and punished hard like Axis bank. Moreover, it is quite unusual when major banking stocks is correcting or trending lower and yet has stocks within it that are moving up nicely and bucking the weak trend pervading the group as a whole. So it is fair to say that market is strong and I maintain my bullish stance on Indian equities for the foreseeable future.

Conclusion:

Smart money are always searching for stocks that have the potential to move higher and earning season always presents great opportunities. Think about it; investors and trader need to do their homework, whether you rather get involved in stock that had weak or strong earnings. And better yet if you can uncover those stocks that report strong numbers and have strong charts. But remember that being patient is the key. Let a company report its numbers, watch the market reaction, key in on the best of the best and wait for a pullback to a key price or technical support level to put your money to work.

Be Prepared for Earning Season….. Be a Savvy Investor..!!

Pankaj