Home > Market View, NIFTY Strategy > Bulls defend their positions

Bulls defend their positions

Wednesday, August 12, 2009 Leave a comment Go to comments

Volatility was the only constant in today’s markets. The markets opened down, went further down till 4350 before bulls managed to bring it back to a respectable closing. The final the damage was only about 15 points on the NIFTY with a closing of 4457. It is becoming evident that bulls are doing their best to defend their positions

Does this mean that markets have again turned bullish?

I’d still have my doubts till we make a 100+ point upmove on NIFTY, say tomorrow (May be take cues from US markets that are 1.5% up as of now). 4500-4550 is a range that will invite a lot of selling from the bears again, so it might make sense to be cautious and book partial profits around this area. Take fresh positions only if markets make a convincing move upwards without much intraday volatility.

As far as individual stocks are concerned, I’d stick with the stocks that are in a firm uptrend. I’d also use this rally to get rid of junk stocks in my portfolio. I still see a lot of participation in stocks like Suzlon,Unitech and RNRLs of the world. One must understand that these stocks are very vulnerable on the downside. Any hint of correction in the markets will bring them down sharply.

And as always-manage your risk properly. Leveraged positions are not advised in these highly volatile markets. As a trader our job is to pick the right spots to buy and sell rather than try to catch each and every move.

If you are a long term investor, use sharp correction in stocks like Asian Paints, Hero Honda,Wipro,Infosys and Maruti to accumulate. Sticking to large caps might be a better option than small caps. For you 4000 level is the critical level to watch.

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