Weekly Market Recap
The major indices took a pause last week only to resume the rally and to achieve the new milestone. I expected NIFTY to be sideways which continued to rally this week, however, I was quite bullish on individual stocks which performed completely in line with my expectation.
In the week gone by the benchmark SENSEX soared further 929 points, or 2.11% to reach at 45079. Similarly, NIFTY gained another 289 points, or 2.23% and settled at 13258. While BANKNIFTY slightly underperformed with a gain of 1.5%.
Current Outlook
Last week, I alluded two scenarios one suggested sideways to mild correction on indices based on exhaustive climactic action appeared and another favoured strong bullish biased provided the internal strength of the market and tendency to completely ignoring the all kind of negativity pertaining to covid-19 which means market is expecting strong recovery in the economy in the foreseeable future.
This week negative divergences among indicators which appeared on NIFTY last week has resolved to some extent in the aftermath of solid rally but not vanished completely. In addition, NIFTY has stretched moderately from its 50- and 200-day moving averages that normally be the case of overbought condition. However, all other factors including market breadth, high-low ratio, momentum and VIX are strongly alluding a solid bullish picture with no sign of reversal in short-term.
Hence, I would simply say outlook is quite positive for selected group of stocks.
Conclusion
However, the divergence among indicator on NIFTY shouldn’t be ignored completely but given the market condition strong bullish biased goes in favour of bulls unless major sign of reversal appears. Hence, one should continue to focus on growth-oriented stocks which are bestowing solid risk-reward ratio. And never ignore the exit warning especially in that kind of lopsided market.
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Be disciplined…; Be a Savvy Investor..!!
Pankaj