Weekly Big Picture – Bulls Emerge Victorious In See-Saw Battle

MARKET PULSE:

Uptrend Under Pressure

Highlights:

Three up and two down days

Weekly Market Review:

Bulls and bears came head to head during the expiry week, resulting in a see-saw battle. In the end, the bulls overpowered bears with a strong rally on Friday resulting in a positive closing for the market. Even then the gain was not sufficient enough to reclaim their 50-DMAs.During the week, both the indices added one distribution day on Monday and shed one on Thursday, thereby leaving the distribution count unchanged at four on Nifty and five on Sensex.

With the continuation of previous week’s selling pressure, the Indian market started on a negative note as investor sentiment deteriorated further in the aftermath of the Punjab National Bank fraud. On Monday, the Sensex and Nifty slipped further with losses of around 0.7% each.

Tuesday was no different as stock indices fell further on account of weakness in private banks and financial companies, which has weightage of around 25% in the benchmark index, Nifty.

Market optimists finally got some respite, as benchmark indices snapped their three-day losing streak, helped by short covering ahead of expiry on Thursday.

The Wall Street added fuel to the domestic sell-off, as bond yields jumped higher after minutes of Fed meeting indicated more rate hikes in the offering. As a result, the Nifty opened lower on Thursday but managed to limit its loss to 0.14%, thanks to a late recovery.

With Friday’s rally, the Nifty posted a weekly gain of 0.37% to close at 10,491 whereas BSE Sensex ended the week 0.39% higher at 34,142.

Broader indices failed to keep up with their large-cap counterparts, as the Nifty Midcap posted a miniscule gain of 0.04%, whereas the Nifty Smallcap drifted 0.17% lower.

On the sector front, most of the sectors ended positively barring Nifty Realty (-1.4%), Auto (-1.7%) and Pharma (-0.9%). Among the positive ones, Nifty IT had a great week as the index advanced 3.5%.

MarketSmith India’s IND 47 index, our proprietary list of top 47 stocks in chart and fundamental characteristics, outperformed the market with a modest gain of 0.1% this week.

The gain on Friday indicates a bullish revival but it doesn’t confirm the overall strength as both the indices are still below their 50-DMAs. In view of this, the market condition remains unchanged at Uptrend Under Pressure. The Nifty Midcap and Smallcap indices are 9.8% and 13.6% off their all-time highs, respectively. For now, investors should continue to proceed ahead with caution.

During the coming week, the Indian stock market will remain closed on March 2, 2018 (Friday) on account of Holi. Following events lined up for the coming week, could turn out to be market movers:

Nikkei Manufacturing PMI Data: February 28, 2018

GDP Annual and Quarterly Data: February 28, 2018

Monthly Automobile Sales Data for February 2018: March 1, 2018

Current Outlook:

– Be cautious with any new purchases.

– Form a defensive game plan for your portfolio.

– Stay disciplined and exercise sound sell rules.

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