Weekly Market Summary:
For the last weeks, I have been writing that markets are moving higher opposite to my expectation; however, I didn’t give up the idea of impending correction or a pull back of, at least to some extent. Market might have taken an excuse of high-voltage political dram in Karnatka or some other reason behind this pull back, but the prevailed real problem I explained in my previous blog.
On Friday, the BSE Sensex slipped below the psychological crucial 35,000 level to settle at 34,848, down 687.49 points or 1.93 per cent on a week basis. Similarly, NSE Nifty ended below the 10,600 level at 10596.4, down 210.10 points or 1.94 per cent. Heavy selling has been witnessed across the board including some heavy-weights in Index.
Current Outlook:
I am not adding the political-drama to my analysis and stick to my viewpoints which I wrote last week, as all of them are equally relevant this week as well. Moreover, nuances of technical analysis indicating that pull back is expected in few large-caps and that may lead the correction in Indices. The delineation of the phases of the chart structure suggest that Nifty, after getting back into the consolidation zone soon after giving a failed break out is not good sign and Nifty has the potential to come down to the bottom of the range at 10,000 as depicted below.
Conclusion:
I am particularly encouraged by the fact that the impending correction may ultimately resolve the problem of market breadth with or without significant price deterioration. So far, so good. In spite of conditions having edged toward the negative, I can’t say that I’m especially excited about the market’s prospects one way or the other, however, as I wrote earlier, I shall continue to look for shorting opportunities in relatively weaker group of stocks. Finally, I would like to remind you, never forget the importance of stop loss.
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Keep analyzing..; Be a Savvy Investor..!!
Pankaj