Home > Market View, NIFTY Strategy > NIFTY set to cross 5000

NIFTY set to cross 5000

Thursday, September 17, 2009 Leave a comment Go to comments

With global equity markets picking momentum again, NIFTY is set to cross 5000 today. When this upmove started, 5100+ was the level I had in mind( had shared this with my subscribers).  Going beyond this level is not impossible and my sense is that we might stay above this level in the coming weeks and months.

Coming back to stocks, a switch to large caps has proved fruitful. We made spectacular gains in the likes of Tata Steel and SBI. Also metal stocks like Hindalco and Sterlite have done well. And do not forget about auto stocks (Hero Honda, Tata Motors,Maruti and Ashok Leyland)! Did you notice how Infosys is leading from the front? In 2007, we had avoided Infosys and in this bull run we are riding it right from the beginning!

This is a particular characteristic of stock trading- when you are winning, you get a lot of winners. This is what is happenning right now. Also when moves begin to go bad, you can also get a string of losers. That’s why it is important to have proper risk management in place to control the leverage and survive the unfavourable times.

If this bull run resumes, one has to make the tactical move of rebalancing the portfolios. My sense is that this is not a bull market where every stock will move. So pick your winners carefully. You don’t want to be caught in the wrong stock at the right time. Also you don’t want to be in the right stock at the wrong time.

If this is the beginning of another multi year bull rally, then you have to position yourself right now. Also, avoid the temptation to do intraday trading. Catch the big moves!

  1. frank
    Thursday, September 17, 2009 at 8:06 pm

    ya i agree…the move will go much beyond 5000 thsi time ..but cautiously ..im in uk at the momeent .and the mood here is simialr .in terms of ftse and dow levels,,due to the green shoots and most eceonmies now bouncing back froim recession .

    also i may be wrong ..but in 2007 when nifty was at 5000 wasnt the sensex at 17500 -18?

    • sagecapital
      Thursday, September 17, 2009 at 8:20 pm

      People are cautiously optimistic. The reason for the same is the “recent painful memory”.Imagine if you suffered 70-80% losses on your investment, would you dare to invest again?
      At the same time, market punishes excessive greed and fear. I still find it difficult to convince people that bull market has resumed. For them this bull market will resume only when we get past previous high of 6100 on Nifty.
      As far as FTSE is concerned, I am a lot more bearish on UK economy than on other economies. But as all equity classes are correlated, we are seeing a global upmove in equities.

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