market momentum: Markets stuck in range, patience key amid lack of triggers: Deepak Shenoy


“But it will have to pass this psychological barrier of the last high so that the behaviour can change from a range bound trading zone to more trend oriented or momentum oriented. Markets flirt with each part of this ecosystem over time. So, it has been about a year or so since momentum was in play and we have got range bound trading or range bound markets for so long,” says Deepak Shenoy, Founder & CEO, Capitalmind MF.

Give us a sense of what you are seeing in the market move. The lacklustre moves continue on the Street. What are you making of the market momentum right now and how should investors just pace themselves because sluggishness is what we have seen over the last couple of weeks.
Deepak Shenoy: This calls on honestly for a little bit of patience because this is a point where markets are going to be waiting for a trigger, for some kind of a directional move ahead. Largely because of a very bullish market last year, we have got a high that perhaps as the market reaches that point, a natural behavioural tendency is that people sell as the market comes towards that last high and every time that those sells happen the market remains that, in this range bound kind of a situation.

And in the lack of a major trigger and that major trigger could be in the form of changes in the geopolitical regimes. There have been some positive changes recently but generally larger change, more definitive clarity whether it is from tariffs or from other points of the ecosystem and an idea about earnings because earnings are just trickling in and as more and more earnings trickle in and come in we will be able to see which of the sectors, which of the industries will or have done better or will do better based on the commentary as well, I think that is going to be the one that drives markets to move.

But it will have to pass this psychological barrier of the last high so that the behaviour can change from a range bound trading zone to more trend oriented or momentum oriented. Markets flirt with each part of this ecosystem over time. So, it has been about a year or so since momentum was in play and we have got range bound trading or range bound markets for so long.

It usually goes back into that kind of a trending zone after a year or two and deeply negative news you could see something bad as well but overall, I feel there needs to be some kind of a trigger but otherwise this is the time to be patient, it is not a time to look for some big sudden changes. In individual stocks you will see some changes have already happened. Last three months, some stocks have gone up significantly simply because of change in commentary, so that is where probably the action will lie, individual stocks rather than the market itself.


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