The markets are booming.
Some few justifications for booking profits:
1. Monsoons look to be delayed. Markets have factored in a bumper monsoon. For first week of June we have 35 pc deficient monsoon.
2. When market fell on Monday, broader markets tanked. Many stocks were down upto 15%.
3. When the markets rose, fewer stocks recorded lesser gains. Yesterday inspite of rise advance-decline was negative. These are classical distribution signs.
4. Markets surging on FII flows. Buy figures were 750 odd crores today and yesterday each, 950 cr day before. Total 3800 crores for June so far. Interestingly in spite of such heavy duty buying markets nor rising much.
5. This is a cheap liquidity driven rally. later it corrects, harder it will fall.
Look to keep a trailing stop-loss.
A break of 4400-4450 may lead to deeper cuts.
Vivek Patil is talking of extracting triangle in which there are 5 legs.
a-b-c-d-e. In which a-c-e upwards and b-d downwards.
To put it in layman terms the falls will be deeper,rises smaller.
a took us from 3534 - 4509
c 4092-4688 and ongoing.
a >c > e and b> d.
Last fall was 417 points nifty so next fall, if we assume 4688 top could take us to 4250 at the minimum.
Trade with caution.