William J. O’Neil said that major market corrections are normal and necessary. It serves to clean up prior excess. They also allow the market to create
a whole new set of chart bases and leaders for the bull market that, in time, always follows. That’s what happened last year. The sharp and dramatic
correction in the latter half of February and March 2020 due to the pandemic left the market jammed before the conclusion of FY20. Q1 FY21 saw
the impact of COVID over the full quarter. Almost every sector across every market got impacted as there was a blend of demand and supply side
issues. But as always, the market saw the recovery in economic activity early, and we emerged from the coronavirus-induced market correction with
a new outlook. My team at William O’Neil India accepted the Work From Home challenge really well and our operation remained as smooth as
always, helping our clients to make investment decisions.
CANSLIM market rules pushed you out of the market early and protected your money in the February-March 2020 selloff. Similarly, the all-important follow-through day brought us back into the market in April. There was a lot of noise that how markets would behave, crash again, etc. But the
market proved that it does not care about noises and opinions. In FY21, we experienced a one-way rally.
It was a good year for O’Neil followers, as we listened to the market, and the market’s information was much more reliable than anything put out
by news and experts. Foreign institutional investors (FIIs)/ foreign portfolio investors (FPIs) pumped in a record amount into India’s equity markets
during FY21. FIIs invested more than Rs 2.75T, the highest in the last two decades. On the flip side, net selling from domestic institutional investors
(DIIs) was more than Rs 1.3T. Like the youngsters dominating in cricket, whether it’s the tour to Australia or the Indian Premier League, the broader
markets and initial public offerings (IPOs) outperformed frontline indices.
What do you think? Please email us any questions or comments.Disclaimer: Information contained herein is not and should not be construed as an offer, solicitation, or recommendation to buy or sell securities. It is for educational purposes only.For more information, see our Legal disclosures here.