Weekly Market Recap
Indices continued to climb higher after a pause and a minor pullback last week. Since the support was well held up, the buying enthusiasm appeared to have become more incisive which has pushed the stock prices higher near to their all-time high.
In the week gone by the benchmark, SENSEX gained a whopping 1914 points, or 3.34% to close at 59276, similarly, NIFTY jumped 517 points, or 3% to reach 17670. While BANKNIFTY outperformed the overall market by gaining 5%.
Current Outlook
NIFTY once again rising effervescently, stocks are heading towards their previous high. Most importantly, the market breadth has improved significantly this week suggesting further upside, and the VIX has also ebb-off quite significantly from its recent high reading and has enough room to climb down. The given configuration favors the bulls unless things turned around sharply.
Furthermore, the technical picture on the daily chart is looking impressively positive as almost the indicators in the below panel are rolling up and they have enough room to go higher before an over-bought condition developed. However, the slanting red line drawing from the previous two highs could be the next level of resistance which is taking a shape of lower highs. Unless Nifty breaks above that level we should consider that level into consideration.
Conclusion
Until last week both weekly and monthly charts were showing a bearish outcome, but the condition seems to have improved on the weekly chart post this week, however, the concern on the monthly chart remains quite intact. Hence, instead of chasing a stock at higher we should wait patiently and let the market bestow the decent buy or sell level.
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Be Patient; Be a Savvy Investor..!!
Pankaj