Sunday, July 16, 2017

Bull market rally knows no top

The markets have started moving on the back of good monsoons and also due to no major glitches in GST implementation. In spite of the rise there are some points to be considered.

1. The rise from 7893 to 9913 has almost been vertical with no meaningful correction. The max correction has been about 250 points.

2. There should be 1 correction of 400 to 500 points pending, whether it will occur now before we reach 10500 or post that is a matter of conjecture.

3. 10500 has been an Elliot wave target and looks like we will reach there by Diwali.

4. Classic signs of some kind of frenzy is apparent, newspapers headlines are talking about sensex, new listings are tripling, the OLA cab drivers are trading.

5. During the 2008 frenzy these were the classic signs. I remember in that frenzy I managed to be interviewed by NDTV as well as made the front pages of DNA with my opinions.

6. How do we play this? Part booking of profits is a must. Good quality stocks is another way of safeguarding one from the markets vagaries.

7. One must not forget, we alwayys get second chances in the markets, 6825 in Feb 2015, 7893 in 2016 November, we still may get some chance.

8. 8940 the pre election gap of March 2017 I think will not be filled for years. It will be known as the Modi gap. Same as 3700 is the UPA gap.

There are still undervalued gems in the market and they can still be bought. I see the next few years as the Modi years or the golden years in Indian history.