If the UPA has won the elections with such a huge majority, it is clearly a sign of bullishness, not bearishness.
Correct - But I presume the markets have a mind of their own... I will not be surprised if the markets, after opening gap up on Monday, actually witnesses a correction either on Monday or the next day!.
Two reasons :
1. We have had - what we may call- a Pre-Election rally on expectation of a stable government. Now do you remember that old market saying "Buy on the rumor and sell on the FACT"?
2. The second technical reason for an expected correction is which many of you may have seen but not observed - The recent price rise in Nifty and its major constituent stocks has been with declining volumes ! (i suggest you see the price and volume charts of various frontline stocks)
A Price rise will be strongly bullish ONLY if supported by rising volumes - which unfortunately does not seem to be the case....
The best strategy therefore will be to book your profits in the euphoria and re-enter the markets in corrections.
Happy trading !!!
CA Rajiv D Khatlawala
Head of Research & Training
JHAVERI Securities Ltd
3 comments:
DEAR RAJEEV
I have been reading a lot and listening to the idiot box for past few days. you r the only one who said it so openly that a correction seems imminent. i personally think you are right(not based on technical analysis but logical analysis). do u think this could be the right time to short this market? or just booking profits is call of the day for the time being?
regards
manoj
Profit booking is what is important in current scenario... Short selling may not be advisable - especially i refrain from short selling 'in anticipation'...
Regds,
I have done the same thing...
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