Be watchful, cautious and deploy 25% of what you normally would
It was in late 1998 that I first came across a copy of outlook money and as someone who had been passionate about stocks, and finance, it was a welcome read. I am not a Sebi registered investment advisor yet so the views carried in this article are what I would do as an active and interested investor in the week ahead and are not a recommendation to anyone, just my opinion.
For the week ahead between June 17 - 23 my outlook on the markets is mildly bearish. We have had a great past month and the nifty as an index has moved from 14,900 to 15,900 and several sectors have put up a pretty strong show. Yes, a lot of this has been thanks to robust results from corporate India and the easing of restrictions on account of the deadly second wave of the Covid pandemic. A lot of the good news now seems factored in and the psychological resistance of 16,000 on the Nifty seems so near and yet so far. I wouldn’t be surprised if the Nifty gives up between 1 – 1.5 per cent over the week and finds its way to 15,500. The markets have strong support at the 15,400 levels and the bank nifty will find some support at the 34,500 levels, which is about 500 lower than the close on June 16. The bank nifty of course has been a very volatile index and has given many 1,000-point swings in sessions in the past few weeks. That said, banks have underperformed in the last week and PSU banks, in particular, have retreated from their recent peaks.
The US federal reserve also concluded its two-day meeting, maintained a neutral stand and stayed watchful of inflation and jobs data. The US economy is picking up and as long as their inflation stays in check and under 2 per cent, they will stick to their earlier plan of not increasing interest rates until 2023.
In a nutshell, my plan for the week ahead is that sitting on cash ready to be deployed in a week from now may be the best idea. If I am to make some investments, my top picks in the week ahead would be pharmaceutical stocks and also some picks in the banking and insurance space. Auto ancillary stocks may continue to see some interest at lower levels with the reopening of Europe and a surge in demand there. A weaker rupee will aid IT stocks. The bottom line is to be watchful and cautious and deploy 25 per cent of what you normally would as we stand at an interesting point heading into the weekly expiry today.
Stay safe, stay well, and happy investing.
The author is the Founder, Gaurav Bhagat Academy
DISCLAIMER: Views expressed are the author's own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.