Weekly Market Summary:
Finally, Nifty plummeted below horizontal support and psychological crucial mark 10K on Friday and Sensex slipped below 33k. I would say, Indian market were trading lower or had shown the sign of weakness early in the week, well before global market weakness prevailed and that is the sign of relatively weaker market among peers. What I heard from news is the equities witnessed heavy sell-off on Friday after Donald Trump imposed tariff on Chinese imports and Beijing drew up a list of retaliatory measures.
Benchmark mark Indices Sensex lost 579.46 points or 1.75% and closed at 32596.54. Similarly, Nifty eroded 197.10 points or 1.93% and closed at 9998.05. Technology stocks remained invincible while rest were all weak; especially the financials.
Current Outlook:
This week was exactly the opposite in contrast to last week, both VIX and market breadth favours the bears. Although VIX remained below danger level of 16, but market breadth was incessantly weak even on one green day Tuesday that warns that market may correct further.
Technically, market is still not in over-sold zone, as we can see VIX is not elevated too much but Indices are at 6 months low that indicates there is more room to correct. Within a cyclical bull correct particularly after a period of year long low VIX environment, steep correction can takes away the VIX up to 25-30 mark that means volcano may erupt temporally. The violent selling may or may not materialize, but the important part to realize here is that the risk of being long (buyer) has just shot higher.
Last week, I expected that under the surface of normal VIX and market breadth, smart money could have accumulated the stocks, which gone wrong this week. I can be wrong at any or many times, however what is important is following the selling discipline or exit strategy with stop loss.
Hence after broken down the support I wouldn’t try to be an apocalyptic to prognosticate the direction of the market unless market itself indicates something.
Conclusion:
We may assume that bear market may have started before we anticipated. Not all of the technical signs have been triggered, but the market behaviour has me convinced. However, I would like to wait patiently before to draw any course of action as earning season is not far away to address the idea that the market is fundamentally sound or not. Meanwhile, as a trader whatever you do always keep a stop in your big positions.
You can write your comments or ask any query below here.
Dance with the trend..!! Be a Savvy Investor..!!
Pankaj
Weekly Market Summary:
Finally, Nifty plummeted below horizontal support and psychological crucial mark 10K on Friday and Sensex slipped below 33k. I would say, Indian market were trading lower or had shown the sign of weakness early in the week, well before global market weakness prevailed and that is the sign of relatively weaker market among peers. What I heard from news is that the equities witnessed heavy sell-off on Friday after Donald Trump imposed tariff on Chinese imports and Beijing drew up a list of retaliatory measures.
Benchmark mark Indices Sensex lost 579.46 points or 1.75% and closed at 32596.54. Similarly, Nifty eroded 197.10 points or 1.93% and closed at 9998.05. Technology stocks remained invincible while rest were all weak; especially the financials.
Current Outlook:
This week was exactly the opposite in contrast to last week, both VIX and market breadth favours the bears. Although VIX remained below danger level of 16, but market breadth was incessantly weak even on one green day Tuesday that warns that market may correct further.
Technically, market is still not in over-sold zone, as we can see VIX is not elevated too much but Indices are at 6 months low that indicates there is more room to correct. Within a cyclical bull correct particularly after a period of year long low VIX environment, steep correction can takes away the VIX up to 25-30 mark that means volcano may erupt temporally. The violent selling may or may not materialize, but the important part to realize here is that the risk of being long (buyer) has just shot higher.
Last week, I expected that under the surface of normal VIX and market breadth, smart money could have accumulated the stocks, which gone wrong this week. I can be wrong at any or many times, however what is important is following the selling discipline or exit strategy with stop loss.
Hence after broken down the support I wouldn’t try to be an apocalyptic to prognosticate the direction of the market unless market itself indicates something.
Conclusion:
We may assume that bear market may have started before we anticipated. Not all of the technical signs have been triggered, but the market behaviour has me convinced. However, I would like to wait patiently before to draw any course of action as earning season is not far away to address the idea that the market is fundamentally sound or not. Meanwhile, as a trader whatever you do always keep a stop in your big positions.
You can write your comments or ask any query below here.
Dance with the trend..!! Be a Savvy Investor..!!
Pankaj