Markets remains volatile, Quarterly results to be watch out for : Epic Research

Weekly Market Report - Mr. Mustafa Nadeem, CEO, Epic Research

Nifty ends down for a second consecutive week after almost 3 months as it dances to the global sell-off tunes across asset classes, be it, equity, Commodity or metals. This was a consecutive second-week fall and the range was wider as compared to previous few losses on weekly basis. BankNifty also posted a second-week loss after 4 months with further weakness in heavyweight stocks.

Fundamentally we are seeing a correction in the market which can loosely be termed as selling off or Panic but this was long overdue. we have seen Global markets and domestic markets ride the wave on the back of liquidity. The liquidity in the environment of lower inflation pulled up the equities across the globe and later it spanned to Energies and Precious metals. So this is just a price wise correction which was due as we have seen stretched valuations. As valuations stretched we have seen earnings also being reported in line on a quarterly basis with a fundamental shift in economic data not just domestically but globally as well. So everything backed up and confirmed each other.

We have been needing correction as its a leveraged market and prices need to adjust to get the weak money out and let smarter money add or position size to make sure the bullish wave establishes a fresh bottom for next wave. We have seen almost 8-9% move in correction and this may further stretch to 10 - 12% but that will ultimately lead to a healthier market at the end of this tunnel.

Technically, as well we have seen the range to be widest in last two weeks with 11150 - 10250. Almost a range of this level certainly hampers the directional players and levels in coming days will be tried and tested. RBI keeping status quo also dented the sentiments post an LTCG phenomenon. Though lower levels of 10100 - 10200 will attract good demand as those are the point of inflection in short term and higher side pressure may be seen building up as the grip of the bears on market in short-term and it will take a lot of effort of bulls to take them out.

Source : Equity Bulls

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