Weekly Market Summary
Two weeks ago I wrote, major Indices Nifty and Sensex looking overstretched on daily chart, but has more room on weekly charts. This week Indices continued to scale up to new highs. The reward and punishment remained the highlight of the week post earnings, ITC surged more than 5% after posting their 1st quarter earnings and Maruti plunged 4% after missed estimates.
In the week gone by the benchmark Sensex ended with a gain of 840 points or 2.3% before settled at record all-time high at 37336, and Nifty50 added 268 points or 2.44% to settle at 11278.
Current Outlook
New all-time high usually made on strange or unusual behavior. In the best of times market can treat good news and bad news the same –the stock rallies—but now, despite indices making new highs the market seems to be getting kind of cranky especially for aggressive sectors like auto. Sudden good news doesn’t get as much positive reaction as we might expect, or market appears to ignore it altogether. Earning report that fall slightly short in expectation cause a stock to take a real beating, like BajajAuto, Heromoto, Maruti and Tatamotors. These kinds of things can be early signs of bigger problems ahead especially in Auto sector.
Moreover, historically, rally in defensive sector like FMCG suggest halt or pull back in indices and one more aggressive sector IT also appear to have topped out. However, on weekly chart Indices appears to move higher further. Hence current outlook indicates rotation of money is happening in a big way.
Conclusion
I would like to ignore the movement on Indices and rather focus on the stocks that are getting or have started to receive the fresh flow of money. I am quite sanguine in my belief that the rotation of money will continue for quite long time.
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Keep Exploring..!!; Be a Savvy Investor..!!
Pankaj