Sunday, December 14, 2014

Short Term bottom may be in sight

The markets continued their correction and fell this week also. The markets fell about 3.7 pc to close at 8224 for the week. The correction has been ongoing for a couple of weeks from the high of 8627.

1. In this present bull market each rise has been about 900 points and correction about 450 points. If we apply that logic then we may be close to a short term bottom at about 8150-8180 area.

2. If the fall continues, then it would imply a larger correction, maybe a correction to entire 5933-8627 rise which could be around 1000 points correction.

3. It would be good to accumulate a few stocks at around 8150 area and keep sufficient funds to add more at lower levels.

4.The FIIs have been net sellers in the past week and hence the market has not got any support.

5. The Gilt funds have given an annual return of about 19 pc. The max return they have give over a period of 1 year is about 25 pc. This implies a gain of another 7-8 pc over current levels can be had.

6. The Parliament session has so far failed to pass any major bills. If the logjam continues it would be bad for the markets.

7. On Monday, the markets may witness a fall due to the poor IIP numbers and the US fall on Friday. It could be a good chance to pick up a few stocks.

Overall, slowly it is time to buy again on declines. watch the 8150-8180 region carefully. If it closes below these levels then we may see 7800 levels on the charts.

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