Weekly Market Recap
Finally, financials resurgent ostentatiously and posted a stellar weekly gain which has resulted in managing to fill some gap caused by their laggardness with respect to NIFTY since cascading fall occurred in March. This week, the financials were solely accountable for the rally in indices, although many individual stocks out of midcap segment have also done remarkably well. Overall, it was quite a week for the market.
In the week gone by the benchmark SENSEX surged 1032 points, or 2.69% to close at 39467. Similarly, NIFTY gained 276 points, or 2.43% and settled at 11647, while BANKNIFTY had a whopping gain of 10% or 2224 points.
Current Outlook
In my last note, I talked about the resilient behaviour shown by the banking stocks which in turn can make it possible for the NIFTY to reach at its previous high, sooner than expected. With the help of technical, I managed to spot the strength in banking stocks right in time. However, the buying in stock specific strategy across the board has also done quite well for quite some time which I have been emphasizing in my last few blogs.
The technology who took the charge and lead the rally followed by metals have been securing their gains and now financials have also joined the party along with mid-caps and small caps. The rally in mid and small caps reminds me of the rhapsodic and euphoria of the 2008, though I was quite novice in my career that time, but it reminds me that the rally in mid and small caps normally occurred in last phase of the bull cycle. Certainly, it doesn’t appear yet that market have reached near the peak, but, yes, we are more likely to have entered into the final phase of the bull cycle that may last longer than expected and perhaps, surpass over and above the expected upside potential.
It is likely that we may see a quite volatile and fickle move by the market going forward where individual stocks may tend to have above average move in either side which makes it difficult for the traders to absorb the volatility as stop loss may get triggered due to large moves. Still, that is the only key to succeed. Hence, outlook is volatile but positive.
Conclusion
By now, almost all the major sectors have contributed their efforts to recoup the losses of NIFTY, technology at the top hovering at all time highs, however, bank index appears to have exited out of the woods recently that suggest a long way to go. Hence, the odds of making a new high for NIFTY is getting strong, but I would still prefer to be stock specific rather than chasing an index and never forget to ignore the exit discipline.
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Plan Your Trade; Be a Savvy Investor..!!
Pankaj