Weekly Market Recap:
Week started off on a strong note as Nifty on Monday surged whopping 194 points and remains hovered at that level for next two days, however, rally fizzled out as the week progress and finally market closed the week in negative territory. The session on Thursday and Friday wiped out the gains in entirety and the benchmark Nifty ended the week with a net loss of 31.70 points, or .31% at 10195, and BSE Sensex was down by 131.4 points or .39% at 33176.
This weekly figure does not suggest any serious loss, but the manner in which vertical downfall occurred is certainly a cause of concern. However, PSU banking stocks were up by 5-10% from their last week lows, perhaps finding the bottoms as I wrote last week, stocks likely to be bottomed out when worst fundamentals coincide with high pessimism.
Technology remains the relatively stronger sector, while rest were all laggards.
Current Outlook:
VIX elevated to 15.22 level, but remains down from crucial level 17. However, interestingly, though benchmark indices apparently pulled down to near low point of last week trading range, i.e. 10146, but market breadth this week is far better than previous week. That perhaps indicate strong hand or smart money is stealthily accumulating the stocks at lower levels. But who knows? If that is the case, it will be confirmed in coming week, for that Nifty should not break down below 10000 mark (see last week blog for the chart), as this level has acted as a strong support in past, and psychological crucial level.
In a typical consolidation phase, market look like – up and down and that is required too, to overcome the one year long persistently overstretch market condition (see Nifty weekly chart). Hence I would continue to be cautiously optimistic and may accumulate the stocks which are relatively stronger, as long as Nifty holds 10000 crucial marks.
Conclusion:
Although, I didn’t expect like Friday wiped out session but it could happen in a high-level-consolidation phase, which is pertinent for healthy market for a longer term perspective. Easy-money-making markets always followed by consolidation and patience test game. Hence stock selection and patience is the key for up-coming phase of the market and most importantly, keeping a tight stop loss at right place in order to make the risk reward ratio favourable is always a challenge and needed.
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Be patient..!! Be a Savvy Investor..!!
Pankaj