Monday, September 21, 2015

Nifty: Breakdown prevented but internals weaken further


Thought for the day

"It is the mark of an educated mind to be able to entertain a thought without accepting it."

—Aristotle (Greek, 384-322BC)

Word for the day

Too-too (adj)

Excessively and tastelessly affected

(Source: Dictionary.com)

Malice towards none

Common youth of India who had zestfully come out of their comfort zones and took on streets just a couple of years ago - is again disenchanted by politics and politicians.

Who is to blame for this antipathy?


As expected (see here) last week NIFTY mostly oscillated within the 7560-7940 range and successfully prevented a break down. Nifty also managed to close the week near 8000 mark, thus leaving chance of the pull back rally extended to 8240 this week.

The internals for the market though continue to weaken. Despite an eventful week the market completely lacked momentum. Institutional activity remained low. Market breadth remain almost even. Implied volatility fell materially.

The retail participation remained high. The small caps showed first sign of capitulation, though broader market continue to outperform.
As the comparison with November 2007-March 2009 period shows, this usually is the beginning of the last leg of a market cycle. Expect large cap to outperform in next 6-9 months as market searches for a bottom.

 

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