Market Recap:
Last Friday on 1-sep, market again showed a sign of strength, however, the past week was mostly sideways in a narrow range. There was a tough fight between bull and bear. Most interestingly, past week action was just further confirmation of strengthening NBFC’s and housing finance group. The group has been outperforming the NIFTY50 since July. This remains the best sector to trade/invest in as we’re seeing both absolute and relative breakouts on solid volume and with strong bullish momentum. Not to be outdone, the metal stocks have also been performing well, another strongest group.
Current Outlook:
As I mentioned in my previous blog that we are heading towards the seasonally bearish month of September along with high valuations, that may result in mostly sideways consolidation action or a pull back to August low around 9700 for NIFTY50. Even though the trend in the core market have remained constant over the past week, but the gold and silver are trending higher on the back of plunging dollar index, which suggest the divergence of funds from equity to considered to be safe heaven assets, that indicates the uncertainty in the environment.
Conclusion:
Given the seasonally bearish month and high valuations, may be it will have to churn sideways some more before a decisive breakout or breakdown takes place. In fact, the key to succeed for short term investors is to find out the stocks with strong fundamentals and solid momentum, while keeping in mind the right entry with favorable risk reward ratio.
Invest with great Idea’s; …..Be a SAVVY investor..!!
Pankaj