Weekly Market Recap
Wow…!! A lot has happened. Though, I shouldn’t be happy in the aftermath of stock prices carnage that we witnessed in this unprecedented week, however, I am happy to realized that I was fully warned and prepared for this kind of pestiferous and noxious pull back.
All those who have been sincerely following my blogs must be aware as I had been clamoring for quite long about not so propitious market conditions for bulls.
In the week gone by, the benchmark SENSEX lost 2872 points, or 7% like never before in a decade, settled at 38297, similarly, NIFTY eroded 879 points, or 7.28% to close at 11201.
Past Conditions and Current Outlook
First, let me remind you about past conditions, since past few months and weeks, I have been writing a lot about not so favoring market conditions for bulls both technically and fundamentally. Technically, like negative or bearish divergences along with unlikely sustained precipitous rally by the prices, most importantly in the absence of market breadth. Moreover, I have mentioned many times about how the top 5-6 heavy weightage stocks are contributing around 60% in the benchmark indices and this has been very dangerous configuration.
Fundamentally, I have expressed my concerned-on valuations which is also unlikely to sustain, click here to read again my blog dated jan-18, 2020 (https://savvycapital.co.in/market-strategy/indices-are-way-over-valued/).
Now, financial media across the globe are blaming uncontrolled pandemic caused by covid-19, centered in China, for this financial carnage seen this week. Well, this might be one of the reasons for this sharp correction, however, my investing model indicated me a way before the upheaval incident took place. And, I always believe, especially in stock market, there is no point to find out the reason once the market has already reacted on it, as by the time you found the reason it’s already too late.
Post this sharp fall, indices certainly look over-sold on daily charts and must invite some kind of bounce-off, however, when I ruminate the weekly and monthly charts, I still found there is enough room for the indices to correct further. Ipso facto, outlook still seems to be gloomy for the buyers.
Conclusion
I would like to conclude by referring to my special blog lessens to be learnt dated Feb 2, 2020 (https://savvycapital.co.in/market-strategy/markets-rattled-and-tumbled/) and would encourage and incite you to create your own model and follow it with the utmost sincerity.
Feedback, comments, suggestion or questions are welcome at below the comment section or at [email protected].
Stick to your Investing/Trading model..!; Be a Savvy Investor..!!
Pankaj