Market Brief – Absence of any significant news flow or any major trigger, markets traded in a range, however due to improved global cues it managed to end the week modestly on positive note, up nearly by a percent. Although markets held well for last couple of months but the internals (breadth) has tuned very bad and the numbers of stocks declining for past couple of month outweigh the stocks going up. Thus, this not an investors markets, rather traders market as of now. It further appears that until we have significant good news flows in terms of economy & industry and better political environment and stability markets will remain jittery and frail.
Though some green shoots are visible as well as tailwinds in term of corporate earnings, inflation, correction in international crude prices, rupee expected to be getting stronger, and interest rates appears to soften all this will help in increase in aggregate demand and thus the economy. Nevertheless, the inverse is not completely ruled out. Investors thus should exercise caution, stay partly in cash say 20 to 25 percent to be deployed if there is deep correction or once the market is stabilized.
Technical –Technically market is in a range for quite some time now, with 10400 and a rock-solid support and
10950 a stiff resistance and in extreme short
term the range is between 10550 and 10740. It appears that range bound trade is
likely to continue for some more time unless it breaks out on either side.
Trade and close above 10950 the upward journey will continue into new historic
high and a close below 10400
a protracted correction will see substantial downside.
Markets needs a superlative and authoritative news flows to move outside the the
range and that looks less likely in the short term.