Weekly Market Recap
It has been quite a strong week for the market as NIFTY has reached an all-time high level. After consolidating in a narrow range under the resistance in the previous week, the market began with a strong opening on Tuesday, followed by a strenuous gap-up opening the next day and the rally continued throughout the week.
In the week gone by the benchmark, SENSEX posted a solid 1511 points gain, or 2.29% to close at 67481, similarly, NIFTY surged 473 points, or 2.39%, and settled at 20267. While BANKNIFTY took a late charge on Friday but managed to gain on par with major indices with a surge of 2.39%.
Current Outlook
The current dominant feature on the chart is that NIFTY made a new high. Last week, I mentioned the major overhead resistance (blue horizontal line) that the NIFTY may face which has been smoothly overcome on the first working day (Tuesday) and it was the clear-cut signal on closing that NIFTY is likely to move higher. In addition, I also talked about the strong seasonality which favors the bulls. It’s easy to see what’s happened thus far in November. And just think, December is typically stronger than November and it’s just getting started.
Furthermore, it is important to note that BANKNIFTY has been the laggard so far but has started to make progress, and technically enunciating a quite bullish setup which can lead to much higher prices going forward. Not only that, few banking stocks are still providing a decent entry.
I think, provided the given condition, a brief respite in NIFTY could be a decent entry point. How much price have to come off to provide a decent entry? A drop to breakout zone could be a perfect entry point but in a super bullish scenario that might not happen, but it’s best to think about this level, though we need to show utmost patience for that.
Conclusion
Rally after some sort of consolidation is always sustainable and propitious which has been the case thus far. Still, reversal may occur at any time, and we should always be prepared for that. I would suggest holding on to the banking stocks and an entry in NIFTY after a brief respite but with the exit discipline.
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Be Disciplined; Be a Savvy Investor..!!
Pankaj