Weekly Market Recap
As expected, market continued to drift lower, but for a time being, market is opposing the intense selling as heavy selling day is followed by buying day as a result net weekly effect doesn’t seems to be pernicious. Well, it might be embezzlement…!!
In the week gone by the benchmark SENSEX closed down with marginal loss of 87 points, or .21% at 41170. Similarly, NIFTY shed 32 points, or .27% and settled at 12080.
Current Outlook
Last week, I wrote about the underperformance by the banking stocks and its impending effect. This week, we saw a significant pull back on indices in first two days, primarily driven by banking stocks. Though selling was majorly offset by buying at the later part of the week as explained above.
To my understanding, the market may take the path of gradual selling rather to be sold off sharply as intense selling or offloading the stocks at lower levels becomes difficult for institutional investors. Moreover, smart money always aims to exit at the optimum higher level as long as they can restrained, especially when the individual participation is not high among heavy weightage best performing stocks. That’s a reason we are seeing a tantalizing rally at lower levels.
Technically, market may continue to trade in the vertical shaded rectangle as depicted in the chart below for next few days or weeks. If you remember, I mentioned about the expected rise in the gold price few weeks ago based on technicals, since then the gold price has gained significantly. A flight to safety into gold is not propitious for equities. Hence, outlook turned out to be extra cautious from cautious.
Conclusion
There is a possibility we might see a one more leg of rally up to the last week’s high or slightly above, but the probability seems to be quite less. And, if see the rally we should try to flinch our self from aggressive buying unless price action and technical indicators move in tandem with each other. Stay alert…!!
Feedback, comments, suggestion or questions are welcome at the below comment section or at [email protected].
Be Alert…; Be a Savvy Investor..!!
Pankaj