‘Greed’ and ‘Fear’ are the two emotions that drive equity markets. The beauty of trending markets is that there are intermittent moments of fear. If these moments are well utilized, you stand a good chance of entering a trend with limited downside.
Nifty 50 has formed a bearish weekly candle for two weeks in a row. The greed has slowly started getting converted into fear. The fear is not of losing capital, rather it is the fear of losing the un-booked profit.
Nifty opened the week at 14,453, made high at 14,753, made low at 14,222, and finally settled at 14,366. Yes, there is a temporary dip in the market on a closing basis.
Is this an opportunity to add more, or is this an opportunity to book your profits? Only time will tell!
However, if you are a trader, you may like to take some profits home.
On the other hand, the earnings season continues to deliver a mixed bag.
Asian Paints announced the results for Q3 FY’21. The announced results are a beat on all counts. Top-line has increased by 25.2% YoY. The bottom-line has increased by a staggering 63% YoY.
In the quarter gone by, Asian Paints has recorded the highest sales with the highest profits ever.
This might raise your forensic curiosity to get into the details of the results. Believe it or not, the juggernaut simply looks unstoppable. Quite naturally, the number of upgrades by brokers is again unprecedented.
Image Source: CNBC TV18
Despite all the great news, a correction was imminent in the market price of Asian Paints!
‘Buy on rumours (expected great results), sell on confirmation (announcement of results)’ is precisely what seems to have happened with the counter.
Tyre companies were in focus too in the week gone by.
JK tyres, Ceat tyres, Apollo tyres, TVS Srichakra have given a technical breakout on long term charts. JK Tyres caught the fancy of momentum investors after the company announced a great set of numbers.
Incidentally, the poster boy of Indian e-commerce, Mr. Sachin Bansal has invested in the company. Wondering whether this breakout in tyre stocks will sustain, or is it just another shortly pullback?
Well, the main reason behind this sentiment change is the recent restriction imposed by GoI on importing tyres in the country. It’s tough to say with certainty how long the party will last.
However, if you are a momentum player, you have all the right reasons to cheer and to ‘make hay while the sun shines.
SBI Cards & payments has delivered an interesting set of numbers.
The company has returned to its ‘pre-COVID’ level in terms of business i.e. no. of cards issued per week, the average monthly amount spent per card, etc. The online sales for apparel & jewellery using SBI cards has increased by a staggering 539% YoY.
That’s quite a significant jump!
It goes on to add that our fellow countrywomen and men have not held their shopping back beyond a point. ‘Why should COVID come in the way of how I look and dress !!’ is what I hear quite frequently these days.
Is it just a matter of time before the ‘new normal’ gets transitioned back to the ‘old normal’?
Well, if the results of SBI cards is anything to go by, we are quite close to the pre-covid consumer spending sentiment.
Data to look for in the coming week
|29-Jan||FY 2019-20 final GDP growth rate||6.1%||N/A|
|29-Jan||Bank loan growth YoY||6.7%||N/A|
Thank you! Until next time – wish you a joyful & profitable next week!