The opening of the truncated week was influenced by a sharp sell-off in the global markets over the weekend which was followed by a marginal pull back on the next trading day.

Stock specific action continued to hog the limelight as investors feared the worst. This was aggravated by the mixed earning posted by Indian Inc. To make matters worse, the rising trend in inflation and the hawkish stance by the RBI weighed on the performance of the banks.

However when it seemed that fear and panic selling amongst the market participants have reached their peaks due to sustained selling at higher levels and consistent breakdown of key support levels, the technical pullback from the oversold zone aided by supporting cues from the global market helped the benchmarks to recuperate from the losses.

The Realty and Metal pack that bore the brunt of selling until the beginning of the week made a come back and were amongst the top intraday gainers towards the end.

The disinvestment salvo by the government on the penultimate trading day of the week also enthused investors and triggered buying across select PSU stocks which toped the charts amongst the gains in the sectoral indices on the last trading day of the week.

Overall, volatility once again remained at its peak during the intraday trading sessions for the truncated week gone by. 

The markets seem to have managed a decent bounce back from its lows it touched in the recent market crash. Whether it will consolidate from here or it would attempt to touch the new highs or lows that it made recently remains to be seen.

Though the risk rewards ratio appears to be better than before in some cases, the current rally appears to be weakening as it scales higher.

With specific triggers almost discounted to the full, the market is likely to react far more aggressively to any negative event that unfolds during the week.

As most market participants are indecisive about the current trend, the probability of getting caught on the wrong foot seems to have increased. The resultant spurt in the volatility also explains this phenomenon.

As we had mentioned earlier, those who were patient must have been able to encash on the opportunity that came at the beginning of the week. Ride on the momentum with strict stop profit strategy for long positions. However those looking for fresh investments can consider taking small exposure albeit at sharp declines.  

In the interim, it may be a while before the dust settles and one would do well to exercise extreme caution while taking aggressive naked positions in the futures market due to the uncertainty that prevails.