Weekly Market Recap
Last week, we saw false break-out above the previous peak as a result I was expecting this week closing to be lower than previous week, however, although, this week started off lower in line with my expectation, but trend got reversed abruptly in last three trading sessions. Not only that major indices managed to close almost at their week highs.
In the week gone by, SENSEX surged 564 points, or 1.4% settled at 41009, similarly, NIFTY gained 165 points, or 1.39%, closed at 12086.
Current Outlook
It looks like that bulls resurgent with strong momentum at the middle of the week and kept dominating till end, however, NIFTY is still hovering in the vicinity of previous high. Though, this time the probability for NIFTY to cross and sustain above its previous peak is relatively higher provided there is a higher low this time.
But, the question arises, is there any room for quibbling on the technicals ?Yes, there are many, like last time rally was fizzled out and turned out to be false break-out in order to exhibit the fallacy move that was arduous to prognosticated. So, it is prudent to ruminate and analyze the impending move patiently before we make the refutation on the internal weakness of the market. It is indispensable for the NIFTY to stay above the previous high to call it next leg of rally after having consolidate for more than 2 years in a range. Unless it happens, caution is warranted as neither the long-term technical indicators nor the breadth issue has been resolved yet.
However, one of the area I have been watching and engross my attention has been metal stocks. There is some positive price action along with prologue strength on charts. I expect a decent rally in selected metals stocks, and more importantly stop loss are very close.
Conclusion
Next week is like an important for bulls to take out the NIFTY from last 2 years trading range so I expect this should happen with slightly higher volume and low volatility. The negative divergences evident on the chart cause me some concern, but the market shows no inclination to enter a serious decline, and it seems likely to me that it will continue higher at a slow but steady pace for few more days.
Feedback, comments, suggestion or questions are welcome at below comment section or at [email protected].
Keep Exploring…!; Be a Savvy Investor..!!
Pankaj