Weekly market Recap

Despite a good bounce off last week, a sharp decline on Wednesday and Friday took it all back, and the market finished the week in red. Last week, I was expecting some choppy session going ahead for a retest of last week low, but we got the retest on closing basis in less than expected time.

The benchmark Sensex ended the week 417 points, or 1.2% lower and settled at 34315, Nifty closed at 10303, after losing 168 points or 1.6%.

Current Outlook

The prominent indicator VIX (volatility Index) again soared back to the level of, close to 20. This is not good because it shows that fear is in abundance as we approached a probable retest. And Advance/Decline ratio remain very weak as on Friday on NSE, 2.5 shares were declined against 1 advanced. We usually anticipate that a retest will result in a completed bottom, but it may not be the case this time. All the technical indicators are deadly negative, but not oversold now that can accommodate the decline more than our expectations. Still, let’s wait how they behave in next week after a retest.

Moreover, so far in this earning season the stock has not been rewarded much after beating expectations, however, stocks has been punished hard on missing estimates.

Conclusion

More specifically, I think it is not a good time to be opening new long positions, and as usual, use stops or other discipline for closing longs. I would not be surprised if the retest failed. Hence, be cautious..!!

I welcome any feedback you may have about the content of this article.

Keep Analysing..; Be a Savvy Investor..!!

Pankaj