Weekly Market Recap
As expected this week started off negatively in the backdrop of weak market breadth and more lows versus more highs, however, indices managed to recover all losses in last three consecutive sessions and closed in green. Pharmaceuticals, which were making new lows since last few weeks received some buy action, consequently recoup some losses.
In the week gone by BSE Sensex added 216.41 points or .61 per cent to settle at 35443.67, and NSE Nifty gained 71.45 points or .67 per cent to close at 10767.65.
Current Outlook
In my previous weekly blogs, I had talked about market breadth which had been persistently weak that enforced me to expect a pullback sooner or later, however, this week despite rate hiked by RBI, markets moved up in conjunction with improvement in market breadth, although except one day it (market breadth) was not as pronounced. As the market closed at its highest for the week, there was a sharp contraction of new highs versus new lows for rest of the week.
For almost 6 weeks market (Nifty) is hovering in narrow trading range, Nifty will face overhead resistance at above 10850. Volatility index (VIX) is in favor of bulls, if market breadth continues to improve then I think bulls have an edge to overcome the challenge in crossing overhead resistance.
Conclusion
I am not looking anything impressive to the upside for the indices, but after seeing some improvement in market breadth, I have initiated long positions in stocks which have corrected to support level post their earnings, where my risk reward ratio is favorable.
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Happy Investing..! Be a Savvy Investor..!!
Pankaj