Weekly Market Summary

This week looks like a lot has happened, but nothing has happened with Indices, market or Nifty started off with negative biased as I expected and selling intensified during mid of the week, however, buying interest returned at lower levels and as a result both Nifty and Sensex managed to recover all of their losses in last two days of the week aided by recovery in the rupee and softening crude oil prices

IT and banking stocks have supported the major indices this week, when large cap IT stocks like TCS and INFY made a fresh high, while banking stocks recovered their losses, combined weightage of  these two sectors is more than 42% in Nifty50.

After having a substantial up-down on a weekly basis, the Nifty50 gained .08 per cent or 8.75 points before closed at 10605.15 while the 30-share Sensex added .21 per cent or 76.57 points and closed at 34924.87.

Current Outlook

The rally we saw in last two days may look like to be extended on the back of plunge in crude oil prices on late Friday night, however, would it be materialized or not, that remains undecided yet. Technically, Nifty on Friday closed precisely below the horizontal resistance line at around 10630 see the chart below, where Nifty couldn’t manage to stay above that level, despite giving a solid break out two weeks ago.

I have not seen any improvement in market breadth (net of advance and decline stocks) except on Friday, which is quite obvious after having a persistent decline for almost a month. I think the part of the reason for the market to rally from lows is the fact that coming Thursday is the expiry day for the future and options. Moreover, earnings season is about to over and markets may decide the next course of action along with direction in coming week. My outlook is cautious and hawkish.

Conclusion

While in markets, something works for some time. But nothing works most of the time. So, you either have growth or value or momentum or you have to move with the times. So, the one thing I really want to always keep doing is to remain flexible, not to become hardened in my approach. Hence based on coming week action I would decide my strategy.

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Happy Investing..!!  Be a Savvy Investor..!!

Pankaj