The markets
continued its downward journey and it got abetted on Thursday and Friday on the
back of some stability in crude prices and Global markets, and it ended the
week on flat note. The fundamentals look weak and jittery with World Bank
downgrading the global GDP growth to 3.4% in 2016 and 3.6% in 2017, but there
is some silver lining for Indian economy where the estimates were raised for
2016 at 7.3%, and 7.6% in 2017, well, it needs to be seen how it unfolds and
the fundamentals play out. Geo-political fears, weak aggregate demand and
awaited policy reforms by Indian Government will all keep the Indian markets
under check. At best, one can expect a range bound trade until we see further
deterioration or improvement in the underlying fundamentals. The Union Budget
next month, too, will play a crucial role in giving the directions to the
markets.
Technically,
as mentioned in the last newsletter, 7200 on the Nifty is a very critical
support and the Nifty for the moment has held this level, and gave a small bounce
back on Friday. The supply of equities on higher levels, will keep the markets
under check, 7500 to 7650 is the first important resistance area. One needs to
see if market manages to close above 7650. If it does close above 7650, we may
see some more upside to the market. However, failing to surpass these
resistance levels and the undertone being bearish, hence, a close below 7200
would certainly witness a sharp sell-off and perhaps 6800 would be tested. The
near term range for the market would be 7200 to 7650, and only a close above or
below either sides would determine the trend going forward.
This is a very
fragile market and usually occurs every 3-4 years, and according to our
studies, this is a sharp correction within the Grand Bull Run. Though painful,
but gives tremendous opportunities to long term investors. One need to be
cautiously and stock specifically optimistic on the markets, and remain
invested or invest in quality companies having good governance and growth. We
once again reiterate that this is a good
portfolio restructuring time.
Contact us
Here:
PRAGMATIC WEALTH MANAGEMENT PVT. LTD.
Head Office:
102, 1st Floor, Topaz Society,
Dr. Nair Road, Agripada, Mumbai Central
(E), Mumbai 400011
Tel: +91-8108178683
E-mail: contact@pragmaticwealth.net
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