Back after hibernation..

I was not able to post during the last few days due to some personal reasons. Now I am back again with my observations.

Fortunately markets didn’t do much during the last month by sticking to the 4500-5000 range. The recent up moves have been encouraging but I’d still wait a bit before taking a trend reversal call. I think we’d know by the end of this week that the current move is part of bear market correction or is it the continuation of a bull rally. Watch for 5050 levels.

Talking of sectors-I’d pick two – Pharma and Oil. Check out stocks like Ranbaxy, Sun pharma which are in the beginning of a long term upmove. In oil sector watch out for Cairn Energy or RPL. The above stocks look very positive. With Oil in a sustained uptrend at $117, it is not surprising to see oil and gas stocks on fire!

IT stocks are also beginning to look interesting and many stocks have generated short term buys.

If you have observed the market behaviour for past few months, you’d have observed the “power of trends”.

Most of the money is made riding these trends rather than picking tops and bottoms. “Buy and hold” just increases the risk and results in massive drawdowns. Many stocks have suffered a 60-70% correction in this downtrend (even so called fundamentally good stocks!) and might never recover again. So use the bounces to get out of them.

So lets wait for an uptrend to appear.And this time do not make the mistake of crossing your “risk limits”.