A substantial part of the market technicals have been swamped away in the Budget Tsunami.
Those who have been reading my outlook for a slightly longer period will remember that I had been inherently and vehemently bearish on the markets for months now. I had only turned bullish a few days before the Budget in anticipation of a Pre-Budget rally and a meltdown post the event. When the markets fell on Thursday & Friday, I upped the bullish ante with the expectations of a massive short-covering post the event. Unfortunately, the markets reacted very negatively post the event and we are left with an almost 5% cut on the Sensex & the Nifty week on week.
Going forward, I'm still expecting a bounce/rally from the current levels. We will see substantial short-covering/bottom fishing at the current levels as the market takes notice of some of the finer/better budget proposals in the coming few days.
The near term outlook is bullish and the short to medium-term outlook continues to be bearish. We continue to add stock-specific longs in the large-cap space.
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