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Stock Market Brief by Imtiaz Merchant for 31st December 2018

ON THE BACKDROP OF WEAK AND VOLATILE GLOBAL CUES AND ECONOMIC CONCERNS THE MARKET, WORLD OVER, FELL DRASTICALLY AND RECOVERED A BIT INCLUDING THE INDIAN MARKETS AND ENDED THE DAY AND WEEK MARGINALLY HIGHER THOUGH WITH LOWER VOLUMES ONCE AGAIN, AND POOR MARKET BREADTH (INTERNALS). WORLD WITNESSED A RADICAL FALL IN OIL AND COMMODITY PRICES HENCE CONFIRMING SLOW DOWN OF THE WORLD ECONOMY. THE MARKETS ARE LIKELY TO REMAIN IN RANGE WITH SIDEWAYS BIAS, ANY FURTHER BAD NEWS ON ECONOMIC, FINANCIAL OR POLITICAL FRONT WILL WITNESS A SHARP AND SWIFT FALL AND THE OUTCOME WILL BE A FATAL AND PROLONGED SELL OFF. HOWEVER, SELECTED STOCK SPECIFIC MOVE SHALL CONTINUE. THE COMPANIES WITH CONSISTENT PROFIT, GOOD GOVERNANCE AND LOW DEBT ARE LIKELY TO DO WELL IN EQUITY MARKET.

 

FURTHER GOVT. POLICY ON REFORM AND FORTH COMING GENERAL ELECTION WILL PLAY A KEY ROLE. ACCORDING TO MANY ANALYSTS THE YEAR OF 2019 WILL REMAIN VOLATILE AND STOCK SPECIFIC. THIS IS STILL AN INVESTOR’S MARKETS AND GOOD COMPANY STOCKS SHOULD BE BOUGHT FROM A LONG-TERM PERSPECTIVE, SECTORS LIKELY TO DO WELL ARE CONSUMER GOODS, INDUSTRIALS, SELECTED STOCKS FROM OIL & GAS, FINANCIALS, HEALTHCARE AND CONSTRUCTION.

 

Technical-Technically THE MARKET IS POISED FOR RANGE BOUND TRADE WITH 10550 ULTIMATE SUPPORT AND 11050 ON CLOSES BASIS RESISTANCE, a close above 11050 the Nifty would initially test 11200 and then, markets can  witness a secular rally towards 12000 plus levels, however close below 10700 the Nifty would test 11550 , if this happens then a prolong correction is not ruled out and markets will enter the bear market , although according to us we have maintained that this is a corrective action and not a bear markets, however one need to look out for 10500 on the lower side and 11050 on higher side very closely to determine the trend going forward.

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