Weekly Market Recap:
In an anticipation of positive events resulting from corporate earnings, market continued to move higher this week. IT behemoth, TCS and INFOSYS posted their earning in line with street expectation on Thursday and Friday respectively.
In the week gone by, SENSEX continued its winning streak by gaining 438.54 points before settle at record closing high at 34592.39, Similarly, NIFTY added 122.4 points and closed at new high at 10681.25. The leadership came from IT, consumer discretionary and energy, while other sectors traded flat with positive biased.
Important Data Released: Date released by central statistic office (CSO) on Friday showed the index of industrial production (IIP) rose to 8.4% in November from 2 % in October. Inflation measured by consumer price index (CPI) accelerated to 5.2% in December from 4.88% a month ago.
Current Market Outlook:
It’s always bullish to see midcap index perform well because it is widely recognized as a volatile and aggressive area of the market where gains and losses can be much greater than we see on the benchmark indices. Anytime that money seeks out more aggressive areas of the market, it suggests traders or smart money are willing to take on more risk and that typically coincide with very bullish market action.
Fundamentally on positive note, after many months sales figure of commercial vehicles in last month witnessed a double-digit growth rate, I think that indicates economy expansion and that typically results in higher GDP in a time to come. My belief is, we are going to see prices being adjusted upward in response to improving economic data. In other words we can say “new normal” is being established.
On the negative side, as I have been cautioned that persistently rising crude oil could be a cause of concern, however, hitherto it (rise in crude oil) has been ineffectual against very strong market momentum.
Hence, I harbor my views that rally of some magnitude is coming.
Conclusion:
Market is anticipating good earnings and that seems to have been discounted at this time, any negative surprises on earnings can detract the rally, whereas better than expected earnings can cause a ruckus. I would advise to be a stock specific while keeping risk reward ratio favorable from technical point of view and most importantly polish up your selling discipline if market snaps back at any time.
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Plan your trade; Trade your plan..!! Be a Savvy Investor..!!
Pankaj