Nifty, Sensex correcting for last four weeks as global cues, profit-booking weigh; broader markets resilient By Ajit Mishra We have been witnessing a gradual decline for the last four weeks, in continuation of the prevailing corrective phase. The recent fall in the global indices, especially the US markets, has also started weighing on the sentiment. In line with the benchmark, the continuous underperformance of the banking index combined with profit taking in heavyweights across sectors added to the pressure. However, rotational buying in select index majors in between is capping the pace of decline. And, the broader indices are still showing resilience, offering some comfort to investors. Since we are seeing a mixed trend across sectors, participation should focus on stock-specific approach and maintain positions on both sides. Also, keep trailing stop losses on the rise in the profitable positions, especially in the midcap and smallcap space.Traders should be watchful for Nifty and Bank Nifty highlighted below and align positions accordingly. Nifty has been witnessing profit taking for the last two weeks and hovering around the support of short term moving average i.e. 20 EMA. The recent price action indicates a loss of momentum and we expect the index to consolidate in a broader range. In case of a further dip, the 19,100-19,300 zone would offer support while a rebound towards the 19,650-19,850 zone would attract profit taking again. The banking index, Bank Nifty, has been continuing its underperformance and currently hovering around the crucial support zone of medium term moving average i.e. 100 EMA. We are expecting the 42800-43300 zone to offer a cushion in case the profit taking extends further. On the higher side, the 44500-45000 zone would be tough to cross citing the mixed performance of the private banking majors. Bullish – Axis Bank, Federal Bank, Hindalco, LIC Housing Finance, Maruti Suzuki, NMDC, Tata Consumer Products Bearish – Delta Corp, Indraprastha Gas, Hero MotoCorp, UPL (Ajit Mishra, SVP- Technical Research, Religare Broking. Views expressed are author’s own. Please consult your financial advisor before investing.)
2. Warren Buffett talked about his business partner Charlie Munger in his letter. He said they both think alike but what it takes Warren Buffett a page to explain, Charlie Munger sums up in a sentence. Charlie Munger’s version, moreover, is always more clearly reasoned.
The lesson for investors: “I will add to Charlie’s list a rule of my own: Find a very smart high-grade partner – preferably slightly older than you – and then listen very carefully to what he says,” Warren Buffett said.
3. Warren Buffett emphasised that his long-time business partner Charlie Munger and he are business pickers, not stock pickers. He further said that efficient markets exist only in textbooks.
“We own publicly-traded stocks based on our expectations about their long-term business performance, not because we view them as vehicles for adroit purchases and sales. That point is crucial: Charlie and I are not stock-pickers; we are business pickers,” Warren Buffett said.
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