It was a
pathetic week for the markets wherein the market internals became extremely
weak and there was carnage in mid-cap and small cap companies. Although, the
major indices, Nifty and Sensex, closed two percent lower for the week, the mid
cap and the small cap closed almost ten percent lower. There was total
despondency witnessed in the market, and total lack of confidence and fear, all
this happened in the backdrop of global market meltdown, China in particular,
falling crude oil prices (signifying the Global recession) and no positive news
on Indian economic growth scenario. In fact there was a poor showing where IIP
is concerned. The only solace market got was good corporate earnings reported
by Infosys, BPCL and Reliance in anticipation of improved earnings, showed
courage and leadership.
Going forward, unless there is a
remarkable improvement in the macros and the micros, the markets will certainly
be vulnerable to more sell-off. Where technical of the market goes, it looks
extremely weak and down side seems very evitable. Initially it appears that
Nifty would test an important level of 7220, that’s about 50 percent
retrenchment from the lows of 2014 to the highs of 2015. If markets fail to
hold this crucial level, then another leg of selling would take to sub 7000
levels. In the short term, the upside remains capped at 7700. Extreme volatile
moves will be the rule of the game, in the near term.
One has to keep an eye on the
earning season, companies showing improved sequential growth in terms of top
line & bottom line will show a remarkable improvement in the stock prices
and at the same time poor results will crush the stock prices further down. The
year 2016, very apparently appears to be a volatile year and it would be a
stock picker’s market. One needs to exercise caution and take courage to exit
from under performing stocks and switch to better performing companies. This is a good portfolio restructuring
time.
Contact us Here:
PRAGMATIC WEALTH MANAGEMENT PVT. LTD.
Head Office:
102, 1st Floor, Topaz
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Dr. Nair Road, Agripada,
Mumbai Central (E), Mumbai 400011
Tel: +91-8108178683
E-mail: contact@pragmaticwealth.net
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