Stock market: Wilting or springing to feet

Photo Credit Twitter Mark Minervini
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By Our Special Correspondent

New Delhi: Stock markets worldwide were battered in May, with the US indexes leading with the crash. The US market staged a smart rally by the end of May to negate the losses.

But the Indian stock markets are still battered.

The global equity rout was triggered by the Russian invasion of Ukraine. The rout turned into bloodbath after inflation globally went out of control.

The equity market pundits have taken out their lenses to read the charts to make predictions for June and the subsequent months.

What holds for the equity market in the coming months is the question widely debated among the traders and investors.

Some don’t miss out to mention that equity markets give opportunities to investors who missed out on earlier occasions.

The greed to make money is alluring.

The share price of Tata Elxsi was Rs 205 in 2014 and it touched Rs 9100 in 2022. Seach for such stocks dominates the minds of the investors.

So, what holds for the immediate future for the equity markets.

The legendary equity trader and trainer Mark Minervini believes that inflation has peaked.

Photo credit Twitter NSE

“Consensus starting top congregate around inflation peaking. I’m sceptical but will let stocks dictate my decisions not my opinion, emotions or scepticism,” tweeted Minervini a few days ago.

On the recent months’ wipe out, Minervini said that “in terms of percentage decline during non-recessionary periods, if we bottomed here this bear market would be shallow like 1998. The closest match currently in terms of price and time is 2011”.

Veteran technical chartist Larry Williams told CNBC that the stock market now has legs to run for a few more months, adding that the equities can bounce till the end of August.

On a 12-year cycle model, Williams argued that the investors had the opportunities to buy into the stock market crash on the lines of 2010, which had battered the wealth in the aftermath of the financial meltdown in the US.

Minervini is, however, cautious in not being committed to predict a sustained rally in the equity market. He is essentially a trader.

In India, the foreign institutional investors have been selling since November last year, and it’s still unbated. The rising interest rates in the US on the back of the FED decisions is driving out the FIIs. But the domestic institutional investors, largely diving into the savings of the people for the mutual funds, have kept the Indian equity markets afloat. Still, some indexes, including IT and metal have been decimated in India, correcting to the extent of 50 per cent.

Will June be better has no clear answers.

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