Weekly Market Recap:
It was the vibrant week for the stock market. Post Diwali weekend; Fantastic and Spectacular Diwali was being celebrated by PSU banking stocks on the street on Wednesday, all PSU banking stocks shoot up in between 20-50% like a rocket in a single day, led by PNB, day after the government 2.1 lakh crore recapitalization announcement for state-run banks to bolster the economy. However, rally in these stocks seems to have descended as they have corrected 10-15% by Friday. Like, Axis bank among private lenders got punished last week, this week Yes bank was hammered by over 8%, post reported its earnings particularly due to elevated NPA’s.
Nevertheless, benchmark indices sealed record highs as BSE Sensex closed above 33000 mark for the first time, closed at 33157.22. Similarly, Nifty closed at new high at 10323.05, gained 176 points in last week.
Current Outlook:
As I wrote in my previous blog that earning season provide great opportunities for smart traders/ investors and that is precisely being noticed in past week action. Within the structural bull market the individual stocks are correcting due to extremely overbought and extended conditions and the correction after reporting their earnings eventually resolves the overbought condition and I hope they may stay or consolidate there for a bit longer. Conversely, stocks which were lagging or consolidating since their last earnings, have shown some positive momentum and set to move higher, this is typically a bullish scenario which suggest money is only rotating hands beneath the surface not looking out the way to exit. Moreover, complacency in the form of low VIX strengthens my bullish stance on the market and I am being conditioned to expect only blue skies ahead at least for some more time.
Conclusion:
I can only conclude that the making money from here on, would not be as easy as we have seen so far, provided stock rotation within the sectors is taking place, Hence pertinent key would be to be stock specific with the combination of strong fundamentals (earning visibility) and technical’s (near support zone within strong move). And remember that market is always vulnerable for a correction, so never forget to keep a stop in place to avoid any significant damage.
Now onwards, you can write a comment and put any query below, on my blog, I would be happy to answer them.
Invest with discipline….. Be as SAVVY investor..!!
Pankaj