Market Recap
Market resilient, defying sceptics (Yes, including me), as a surge at month end erased most of the month losses. Nevertheless, India GDP rate slowed to 5.7% in Q1 of 2017-18, perhaps on the back of de-stocking ahead of GST implementation and lingering impact of demonetisation. The slower pace of GDP growth also means India lost the tag of the world’s fastest-growing large economy for the second straight quarter to china, which grew 6.9%. However, the market appears to resume its uptrend after completing a mild correction, this pattern is quite bullish and is the reason to overhaul the strategies, to choose the best stock in the best industries at the best price for investment or trade. Like, mostly auto stocks rallied on last Friday on the back of monthly sales figure.
Current Outlook
Let me say this, Never, ever underestimate the power of bull market. They crush bears. Bears market don’t occur very often so it really doesn’t pay to always be trying to call a top. Even though the market is hovering few points away from the life-time highs with positive biasness. But the question remains….Should we be bullish or bearish right now? Here I would like to refer my last week blog, and the answer is “cautious” given the high valuation.
While September historically, the weakest calendar month that’s moved lower more often than it’s moved higher. On the other hand, On Sunday North Korea’s claimed it has successfully detonated a hydrogen bomb that can fit onto an intercontinental ballistic missile, advancing its quest to be able to hit the US with a nuclear weapon, that’s make this September more vulnerable, which market ignored so far, but I personally believe that could be the turning point for the market if situation worsen further.
Bottom line: For the traders, let the price action dictate what moves you need to make in September. Trade what you see, not what you hope or feel. Also, in term of trading idea’s stick to areas of the market that do not show sign of weakness, as these areas should perform well in a rising market and have the best chance to weather any short-term selling.
Invest with Discipline; Be a SAVVY investor..!!
Pankaj Saini