Weekly Market Recap
Well…! As I reckoned, markets slipped towards the bottom end of the range that was established last week, though it is ostensibly above from the low. As I wrote, market might have formed the short-term bottom and peak last week and most likely both SENSEX and NIFTY may oscillate in this broad range unless VIX dwindle down from atypical high level.
In the week gone by the benchmark SENSEX again lost whopping 2224 points, or 7.46% to close at 27590, similarly, NIFTY fell exuberantly 576 points, or 6.66% to settle at 8083. While BANKNIFTY fell with greater resonance and lost 13.62%.
Current Outlook
Though, it is abstruse pursuit to consider that the low will be hold provided the downside momentum is still quite high, especially the way banking stocks are falling in congregation, they still have maximum weightage on index. However, it is quite evident that short-term peak is in place at 9000 after the so-called stimulus package announced by the RBI last week. It is indispensable to ruminate that the market has ostensibly ignored the relief stimuli and resumed it downtrend.
Technically, I believe there is fair probability for the NIFTY to hold the lower level of 7500 as currently VIX at 55 is still elevated above normal level, though it has eased off quite significantly from its high 90. However, I am prepared if NIFTY unwittingly break below the 7500. It is, however, apposite to note that VIX need some room to blow off further and this process may continue in the year ahead.
Below chart A (click to dilate) which I depicted last week, and chart B evince the current state of the NIFTY. We can say that outlook is not at all good in a foreseeable future.
Chart A
Chart B
Conclusion
When almost all the sectors are breaking down, it is virtually certain that a retest of the March lows is just around the corner. Bear Market Rules? The lows probably won’t hold.
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Pankaj