Weekly Market Recap:
The Week started with a battle between bulls and bears at key overhead resistance on Nifty at around 10600, fight continued until April F&O expiry on Thursday, however, on Friday bulls emerged out to be a winner with a gap up opening above key resistance level and concluded the week in their favor. On Friday, BSE Sensex gained 256 points, or .74 per cent, to close at 34,970, while Nifty50 ended just shy of the crucial 10,700 mark at 10,692, up 75 points for the day.
On a weekly basis, Sensex gained 554 points, or 1.6 per cent while Nifty50 added 128.25 points, or 1.21 per cent.
Among key highlights, after a quite long time, Maruti Suzuki disappointed Street with lower-than-expected Q4 numbers (See my blog dated 24-dec-17 where first time I gave disclosure on Maruti). Axis bank posted its worst quarterly earnings, while Reliance Industries posted its highest-ever quarterly profit post market hours on Friday and market is due to react on its numbers on Monday.
Current Outlook:
In coming week, quarterly earnings will continue to dominate the proceedings. As I wrote last week, I am expecting the market to be in range bound until earning season is over, as stocks will be rewarded-or-punished based on their quarterly earnings. I did not expect Nifty to cross above overhead resistance as depicted in chart in previous blog, but it happened.
Interesting key take away is that, until last week only IT stocks were driving and dominating the overall market, however, this week ball shifted in the court of very few selected auto, pharma, private banks and NBFC’s. Therefore, it is quite apparent that relative rotation is happening under the surface, perhaps in the anticipation of strong earnings from these selected stocks.
Relative rotation also suggest that money is not looking at exit door, rather shifting from over-value to undervalue stocks and there is no best time to do this except earning season.
Conclusion:
I continue to believe that benchmark indices may remain sideways while individual stocks will provide buying and shorting opportunities based on their earnings and technical levels, like minor pull back after strong earnings with no virtual technical damage would be a nice entry. Hence, it is always important to find a nice entry while keeping risk-reward ratio favorable. Most importantly, never forget to keep a stop in place.
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Always find a nice entry..!! Be a Savvy investor..!!
Pankaj