Author: Beeline Blog

Markets Weekly Sentiment_15072017

Beeline Blog

Markets closed up about more than 2% for the week. Nifty ended at striking distance from 9900. As you read this SGX has already breached that level. Large caps showed a lot of action with Reliance hitting highs again. The sentiment is upbeat albeit a bit of froth was seen in some IPO counters. Volatility ruled names like CDSL, AU Finance, ERIS and HUDCO. These stocks saw huge price action.

Technically speaking the markets finally broke out and are at all time highs. 9900 puts have seen some shorting and call writing has been subdued. 9720 (last high) is now a base level and key to Nifty’s immediate trend. On the upside 10k is doing the rounds – and may be a reality soon. 9450 seems to be the new intermediate bottom.

Fundamentals will start to show soon as results season has kicked off. Inflation came in at an all time low in years prompting an increased expectation of rate cuts. Multiples are inflated and at historical highs. Nifty continues its 24x P/E. With a lot to reach in terms of individual results one has to play the ride cautiously. A small reason – be it geopolitical or random news flow, can create havoc due to historically stretched levels.

Globally DOW and S&P found their own reasons to close at all time highs. The “reduced” fear of a rate hike from not-so-encouraging economic data  prompted a positive close to major US indices. What is surprising to see – the CBOE VIX – volatility index has hit an all time low since 1993. For a contrarian trader this is complacency at its best or worse.

Sectors to watch out for next week are Infra and Banks. Stocks in these indices may stage an extended rally if market sentiment supports them. PSU banks were showing some action and select are likely to do so going forward. Pharma companies have given a very strong show over the past few weeks. The rally should consolidate before scaling old highs. One has to be stock specific as result season will continuously re rate a lot of these issues.

Markets Weekly Sentiment

Beeline Blog

Markets were up for the third straight week. Nifty ended up half a percentage point 7 points shy of 8800. RBI policy was a non event. Result heavy week say individual reactions and a mix batch of results for a lot of companies. The 8800-8900 journey is likely to be faced with a lot of supply and resistance.

Global markets all across the world hit their respective life highs. Dow is strong above 20k and although looking overbought the euphoria continues. This will have a clear ripple effect for our markets as well. Like stated in my last blog although exhaustion and overheated indicators point to a stall in the current rally, markets could well be headed higher.

Results season will continue on D-Street and individual stocks will have reactions of their own. Markets will still be in a sideways to bullish tone. Correction is overdue but it seldom happens when all expect it to. Sentiment seems bullish and some caution is advised.

I still restate last weeks outlook. Fundamentally as well as Technically market looks overbought. At 22-23x PE and mix results, such hefty valuations are difficult to justify. Charts show some stalling and sideways movement could happen. If a negative trigger is played out correction may be on its way. Having said that all longs must be protected with stop-loss and no shorts should be open.

In individual stocks one can look at Machino Plastics. Results are expected on the 16th and stock has given a breakout with volumes. One can look for targets of 290-295 with a stop-loss of 230. CMP stands at 258.

Keep an eye on the liquidity, FII flow and the beginning of UP elections for the next week. These may well dictate markets domestically. Globally speaking it’s all too calm as of now and nobody knows when or what the next trigger of news flow will be

Weekly Markets Sentiment

Beeline Blog

Markets inched higher in the post budget week. Indices closed up about a percentage point and closed the week firmly above key levels – Nifty 8700 and Sensex 28000. The markets looked overstretched/overbought at current levels and may see a pull back in the days and weeks ahead. Result season should continue its due course and one will see a lot of individual company reaction to numbers. This result will also be crucial for many companies as these are first look earnings after demonetization. Also RBI policy will be a key event to watch out for besides tracking the global events and FII flows. Goa and Punjab polls have been finished and domestically speaking one will keep an eye out on the political picture as it develops.

The underlying sentiment in the market seems bullish and there are no available triggers globally that would trigger a pullback. Having said that fundamentally a 21-22x PE for the market has historically been considered as “high” and one needs to be cautiously bullish while taking positions. FIIs have been net buyers for the week and the month till date pumping about 555 crores in cash segment. Should this flow continue one will continue witnessing higher levels in the market.

Global market sentiment is also bullish. US markets look to be euphoric at current levels. Valuations are at historical high levels post Trump win. Volatility seems to have dissappeared from the markets altogether. A pull back in US markets is also awaited as the DOW has rallied a lot in the post election period.