Weekly Market Recap

In yet another wide-ranging side ways week, the NIFTY oscillated in a 400-point range, ending the week with mild cut. In my previous blog, I had raised the concern about false break-out on NIFTY above 12k mark and in line with my expectation market didn’t show any intention to break and sustain above the critical resistance level.

In the week gone by, the benchmark SENSEX lost 163 points, or .41% to close at 39452; similarly, NIFTY was down by 47 points, or .40% to settled at 11823, whereas, BANKNIFTY underperformed the over-all market as a result was down by 452 points, or 1.46%.

Current Outlook

As I wrote last week, tug-of-war between supply and demand is still intact, although supply seems to be on dominated side in late last Friday that resulted in negative weekly closing for the benchmark indices and my double-top scenario has again gained relevance . I bring the same updated chart below here that I discussed last week in which it is quite apparent that NIFTY is struggling to get back above broken lower rising trend-line (green line) which has been acting as a strong resistance. Technically, NIFTY has to undulate between these two (red & green line) rising trend line to rise further in an uptrend, however, since the trend is broken in oct-2018 NIFTY has not been able to be in uptrend, though we have seen precipitous event based rally above 12k mark, but sustainability is remains in doubt. Market breadth was quite weak through-out the week.

On the other hand, Gold price this week caught my attention as I have been analysing it since last few weeks. After consolidation more than seven year, I am seeing possibility of upside in gold prices that won’t be great configuration for equities. Moreover, VIX which is at lower-band of last 1 year at 13.9 has a wide room to rise in contrast to the market. Hence, present set-up is not very bullish, however, price is not coming down aggressively, perhaps because of smartly distribution doing by market makers or smart money.

Conclusion

This week we had positive IIP data, but market didn’t react positively, rather behaved in a similar manner like post rate cut by RBI last week. This means market is not reacting positively on good news and that’s a bad news. Let see how the market start on Monday morning after witnessing a selling pressure in late Friday. The technicals of the market indicating lower prices ahead.

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

Patience is the companion of the wisdom.!;  Be a Savvy Investor..!!

Pankaj