Home > Trading Ideas > Bull market uptrend or bear market rally?

Bull market uptrend or bear market rally?

Monday, May 5, 2008 Leave a comment Go to comments

It looks like the world is still debating if this is a bull market uptrend or a bear market rally. We are working with couple of “what if” scenarios and so far we have been long on this market from the 4950-5050 levels. Infact a timely entry has ensured 5-10% gains in many stocks.

Infact in the beginning of this rally I was not too sure if this was a bull market uptrend or a bear market rally but analyzing deeper, I am finding this more of a bull market uptrend. So I’d advise people to play for even 6000 in the next 1-2 months if you really want to take this low risk trade. At the same time, I’d watch for 4950-5000 on the downside. Any break below that will invite fresh shorting of this market and shall confirm a bear phase.

So ride the uptrend till you are proved wrong! 5400 level on NIFTY is a good place to book partial profits.

And keep yourself away from a lot of expert advice. An expert takes time to reverse his/her decisions whereas markets do so almost in a hurry.

Stick to large caps-especially IT,construction and banking sectors. In auto, check a stock like Hero Honda or Ashok Leyland- look very interesting.

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Categories: Trading Ideas
  1. sagecapital
    Wednesday, May 7, 2008 at 9:57 pm

    Ravi-Why are you worried? If you feel strong about your “scenario”, go long on oil and go short on autos and interest sensitives!
    Of course, it shall be bad for the economy as such high prices shall fuel inflation and dampen growth.Also as Govt’s fiscal deficit rises, it shall put a strain on rupee(good for IT stocks!) and also on interest rates. Remember high interest rates are usually bad for the economy and particularly harsh on equities!
    At the same time, I feel oil can touch$200 if US/Israel attacks Iran.
    My sense is that it shall be hard to earn money from real estate(double whammy of high rates/less demand and high input costs) and equities in the coming times.
    I am firmly in the Jim Roger’s camp when he says that bull run in commodities might have just started.
    IT, pharma and oil might be sectors to make some money.

  2. Ravi
    Wednesday, May 7, 2008 at 4:48 pm

    Dear Sage

    Crude is touching new highs every day.With demand in the country also going up, the hit that the oil companies is taking must be huge. Reliance has already closed all thier outlets. Do you think that the govt can indefinitey continue to hold the prices artificially? what if the crude touches 200$ by the end of the year? How will the govt manage the deficit then without passing it down to the people. Imagine petrol selling at 100 Rs a litre. Will it not impact the industry and the market?

  3. sagecapital
    Wednesday, May 7, 2008 at 9:42 am

    Sure..This might be a good time to churn your portfolios.

  4. Hozefa NC
    Monday, May 5, 2008 at 6:45 pm

    Dear sage

    Can I send you my portfolio again for your views on your email address ???

    Awaiting your answer…

    Best Regards
    Hozefa

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