Market Brief – Markets traded in a broad range of almost 300 points and on the back of good global cue rate hike by RBI and anticipated good monsoon, soften crude oil prices, recovered the markets to end the week on modestly positive note otherwise looking a frail market. Although markets rallied from the low, nevertheless, it’s too early to say that markets will see sharp rally until there is more improvement in the underlying fundamental. Going forward the corporate results, monsoon, crude oil prices, economic policy initiative by the Govt., and politics will dominate the markets and one needs to watch out the development closely. Nonetheless, stocks specific moves in the market should continue and investors should look in for companies with least debt or no debt, governance, good cash flow, and progressive gross and net margins of profit. Avoid contra buying.
Technical – Technically the market now is broad range between 10500 and 10900, and extreme near term it is in a range between 10650 and 10850 and a close on either side will determine the trend going forward, the trend is now in sideways. Selected stocks are doing quite well and many of the stocks are not doing well and are near their 52 weeks low particularly in the mid and the small cap companies. It appears that based on the fundamental factors market will sooner than later come out of the range and on breakout one should ride the trend, however if the market chooses to break down then one must use stop loss and exit stocks or else the correction can be sharper than expected.