When markets get stuck up in trading ranges investors do face a tough time. Unfortunately, the current indecisive phase has extended too far for the comfort of investors. In such circumstances, it is desirable to change the strategy of investment. One should try to enter the markets at the lower end of the range and try to book profits/ losses towards the higher end of the range. However, long term investors should keep away from the markets.
Although the long term trend of the markets is still undecided, the third quarter results having been discounted, the markets in the short term will tend to follow the international cues and global/ domestic economic data. Global equity indices recently have shown a positive bias and India will not be an exception. But how far this rally will extend is any body's guess, so one must keep on booking partial profits/ losses in the current rally. The crucial levels to watch out for would be close to 10200 on the Sensex and 3100 on the Nifty. The market is ultimately likely to catch up with the negative news on the political/ economic front. The news flow in the run up to the general elections as well as disturbing economic data may lead to sharp corrections after the current rally has run its course.
One thing is for sure, the next down turn will offer really attractive long term investment opportunities. We may see such a bottoming out situation within the next 6-8 months. Investors must maintain enough liquidity to encash such an opportunity.
No comments:
Post a Comment