Stock market sees ambiguous trend over the past week
The stock market declined at the start of last week and then recovered, leaving the indices little changed. The Sensex finished 0.77% or 135.49 points lower, and the Nifty ended 0.49% down. The CNX Midcap Index gained 0.97%.
Sterlite Industries was the biggest winner among index stocks with a 4.2% gain. The other index stocks to go up included HDFC, ONGC , Tata Motors and HDFC Bank with gains between 3.8% and 2.4%.
Sun Pharmaceutical was the biggest loser among index stocks with a 7.0% loss. The other index stocks to go down included Jaiprakash Associates , DLF, Maruti Suzuki and Reliance Industries with losses falling between 6.2% and 5.0%. Indiabulls Financial was the biggest winner among the more heavily traded non-index stocks with a 19.9% gain. The other non-index stocks to go up included Indian Bank , Reliance Natural Resources , Lanco Infratech, Andhra Bank , Valecha Engineering , LIC Housing Finance and Aqua Logistics with gains between 16.9% and 7.7%.
Balrampur Chini was the biggest loser among the more heavily traded non-index stocks with a 6.0% loss. The other non-index stocks to go down included Mundra Port, Apollo Tyres , Educomp Solutions , Shree Renuka Sugars , Jubilant FoodWorks, Sarda Energy & Minerals and ABB with losses falling between 5.5% and 3.8%.
INTERMEDIATE TREND:
The market’s intermediate trend is best described as ambiguous, as the Sensex and Nifty are in intermediate downtrends, and the CNX Midcap is in an uptrend. In fact, the midcap index even closed at a new bull market high on Friday . The CNX Midcap Index will have to breach 7,750 to enter an intermediate downtrend. The Sensex would have to cross 17,850 to get into an intermediate uptrend, and the Nifty’s equivalent is 5,350. Global markets are also in intermediate downtrends, except for the US and Tokyo. A fall below 10,925 would place the Dow in a downtrend.
LONG-TERM TREND:
Our market’s long-term trend is still up, since the indices made fresh bull market highs during the last intermediate uptrend. However nearly 15% of the more heavily traded stocks are in individual bear phases, and it’s not a bull market for all stocks. The Sensex would enter a bear market if it falls below 15,300, and the Nifty under 4,500. The CNX Midcap’s bear phase trigger is 6,350. The lower of the last two intermediate bottoms for the indices has been taken as the bear market trigger, as they are very close to each other.
TRADING & INVESTING STRATEGIES:
Increasing portfolio exposure should be avoided for now, as the bull market is over two years old, making this a little too late to get in. If cash must be invested, wait for an intermediate downtrend to be established unambiguously, and then run for a week or more. It would be a good move to keep portfolios a bit defensive by switching out of highly volatile sectors such as sugar, real estate, construction, airlines, financial services and even metals, even though some of these stocks have rallied recently. These sectors are better suited for short- to medium-trend trading, due to their tendency to fall heavily during market declines.
GLOBAL PERSPECTIVE:
Global markets are also in intermediate downtrends, except for the US indices and Tokyo. A fall below 10,925 will place the Dow in a downtrend. Many of the global indices made fresh bull market highs during their intermediate uptrends, suggesting that the global bull market is still on. A few indices had come close to falling into bear markets during the last intermediate downtrend, but appear to be back in stable bull markets once again. The Dow will enter a long-term downtrend if it closes below 9,800. Shanghai may be in a bear market as it has a lower intermediate top and bottom.
The Sensex gained 53.5% in the twelve months that ended on Thursday, keeping it at the 7th place among 35 well-known global indices considered for the study. Sri Lanka continues to head the list with a 126.0% gain. Argentina, Turkey, Indonesia and Russia follow. The Dow Jones Industrial Average has gained 36.7% and the NASDAQ Composite has gained 46.3% over the same period. (These rankings do not take exchange rate effects into consideration).
Sterlite Industries was the biggest winner among index stocks with a 4.2% gain. The other index stocks to go up included HDFC, ONGC , Tata Motors and HDFC Bank with gains between 3.8% and 2.4%.
Sun Pharmaceutical was the biggest loser among index stocks with a 7.0% loss. The other index stocks to go down included Jaiprakash Associates , DLF, Maruti Suzuki and Reliance Industries with losses falling between 6.2% and 5.0%. Indiabulls Financial was the biggest winner among the more heavily traded non-index stocks with a 19.9% gain. The other non-index stocks to go up included Indian Bank , Reliance Natural Resources , Lanco Infratech, Andhra Bank , Valecha Engineering , LIC Housing Finance and Aqua Logistics with gains between 16.9% and 7.7%.
Balrampur Chini was the biggest loser among the more heavily traded non-index stocks with a 6.0% loss. The other non-index stocks to go down included Mundra Port, Apollo Tyres , Educomp Solutions , Shree Renuka Sugars , Jubilant FoodWorks, Sarda Energy & Minerals and ABB with losses falling between 5.5% and 3.8%.
INTERMEDIATE TREND:
The market’s intermediate trend is best described as ambiguous, as the Sensex and Nifty are in intermediate downtrends, and the CNX Midcap is in an uptrend. In fact, the midcap index even closed at a new bull market high on Friday . The CNX Midcap Index will have to breach 7,750 to enter an intermediate downtrend. The Sensex would have to cross 17,850 to get into an intermediate uptrend, and the Nifty’s equivalent is 5,350. Global markets are also in intermediate downtrends, except for the US and Tokyo. A fall below 10,925 would place the Dow in a downtrend.
LONG-TERM TREND:
Our market’s long-term trend is still up, since the indices made fresh bull market highs during the last intermediate uptrend. However nearly 15% of the more heavily traded stocks are in individual bear phases, and it’s not a bull market for all stocks. The Sensex would enter a bear market if it falls below 15,300, and the Nifty under 4,500. The CNX Midcap’s bear phase trigger is 6,350. The lower of the last two intermediate bottoms for the indices has been taken as the bear market trigger, as they are very close to each other.
TRADING & INVESTING STRATEGIES:
Increasing portfolio exposure should be avoided for now, as the bull market is over two years old, making this a little too late to get in. If cash must be invested, wait for an intermediate downtrend to be established unambiguously, and then run for a week or more. It would be a good move to keep portfolios a bit defensive by switching out of highly volatile sectors such as sugar, real estate, construction, airlines, financial services and even metals, even though some of these stocks have rallied recently. These sectors are better suited for short- to medium-trend trading, due to their tendency to fall heavily during market declines.
GLOBAL PERSPECTIVE:
Global markets are also in intermediate downtrends, except for the US indices and Tokyo. A fall below 10,925 will place the Dow in a downtrend. Many of the global indices made fresh bull market highs during their intermediate uptrends, suggesting that the global bull market is still on. A few indices had come close to falling into bear markets during the last intermediate downtrend, but appear to be back in stable bull markets once again. The Dow will enter a long-term downtrend if it closes below 9,800. Shanghai may be in a bear market as it has a lower intermediate top and bottom.
The Sensex gained 53.5% in the twelve months that ended on Thursday, keeping it at the 7th place among 35 well-known global indices considered for the study. Sri Lanka continues to head the list with a 126.0% gain. Argentina, Turkey, Indonesia and Russia follow. The Dow Jones Industrial Average has gained 36.7% and the NASDAQ Composite has gained 46.3% over the same period. (These rankings do not take exchange rate effects into consideration).
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