Tuesday, 23 September 2014

Market Brief

Pragmatic Wealth's Weekly Newsletter

Amid high volatility markets ended this week with marginal gains (Nifty) of 15 points, volatility was also witnessed in stocks across the board. BJP’s poor performance in the by-polls further weighed down the sentiments in the earlier part of the week, however better news flows in the later part of the week in terms of huge  investment commitments by China raised the hopes and markets recovered. For the week ended September 19, both the benchmark indices rallied 0.1-0.2 percent. AUTO, IT, PHARMA and Banking Sectors performed well. Industrials and Infrastructure/Construction sector took a back seat. Pharma index and auto gained 1-1.4 percent. Capital goods, infra slipped 1.6-2 percent this week, metal index was down 3 percent.

Going forward markets are likely to remain volatile in the near term and a range bound is expected next week. Technically, 8000 on the lower side is a strong support area and on the higher side 8200 is a supply zone, since the undertone is bullish a break-out above 8200 on close basis will trigger a sharp rally and soon 8400 plus levels will be on card. On the other hand, hugely negative news flows and a close below 8000 on the Nifty would call for a deeper correction and 7800 can be tested.

Investors should stay cautiously optimistic on the markets. Short-term investors should be little wary and have a stop-loss discipline, nonetheless the long-term investors can use declines to buy quality bullish stocks particularly from AUTO, HEALTHCARE, Information Technology, CONSUMERS and CEMENT sectors. We advise investors to stay away from high-leveraged companies particularly from sectors like CONSTRUCTION, METALS, POWER and CAPITAL GOODS.

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