Weekly Market Recap
The Q1 earning season is in full bloom with major corporate earnings announcements flowing. As expected, the companies that came up short of expectation were punished while those that met or beaten expectations are rewarded, which is the way it should be. For example, Bajaj-auto and Mindtree were punished hard; both were down almost 10% after missing estimates, while Bajajfinance and BajajFinserv were rewarded significantly with a gain of 7-8% in a single session.
This week market (index) was almost flat; BSE Sensex ended the week with a minor loss of 45 points or .12% to settle at 36496, Similarly, Nifty closed with a loss of 8 points or .08% at 11010.
Current Outlook
I have already talked about the change in leadership in my previous blog and that is quite apparent this week as well. Money is rotating in a big way within the sector and to other sectors and earning season is best time to do so.
Market breadth has been persistently down which has proved to be ineffectual for the indices, but that should be the case to ruminate in our analysis. Moreover, VIX (volatility Index) remains slightly elevated this week, although that is normal when results coincide with coming expiry week, still caution is required as something unusual is happening in the market.
I would suggest to wait tranquillity and let the unusual scenario to be diminished before prognosticate anything about the market.
Conclusion
It will be difficult to say that Nifty and Sensex will top out near this level again, but absence of follow through from last week vigorous move suggest loss of momentum at higher levels and that portends a correction of some magnitude. Hence, pertinent action would be to wait patiently and always remember that by not doing anything; you are still doing something because that is your decision.
I welcome any feedback you may have about the content of this article.
Invest Patiently..!! Be a Savvy Investor..!!
Pankaj