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NIFTY Strategy

Tuesday, September 22, 2009 Leave a comment Go to comments

Past few weeks have been great for the markets and it looks like the coming few weeks might even be better. The markets touched 5000 and then came back. 5000 is a psychological barrier and the longer it takes to cross it, the better it is for the longer term health of the market. Such market behaviour prevents excessive bubble formation and keeps a health dose of scepticism alive in the market. As an investor, it is importnat to distinguish the trees from the forest.

What is hapenning in the markets is “sector rotation”. So what we are doing is also follow the markets. We made our money in auto and then in steel and banking. We continue to hold our long term positions but taking money off the table in short term positions. The rationale for the same is simple- excessive portfolio risk. When you expect 5% moves in a week and you get 20-30% moves, it is important to take some part of open profits. At the same time, we are focussing our energies on finding new stocks and new sectors that are ready to rocket. Getting in the early part of the move is important  in order to make good gains and reduce the risk.

I know many investors are waiting for correction and they are still not convinced about this bull run. Many commentators are calling it a bear rally! What if the markets continue to go up for another year or so and index moves by another 20-30% ? What would they call it then?

Technically, we can have a correction till the 4750-4800 range but that won’t make it a bear market.

Let’s not bother ourselves with the definitions. As long as you are on the right side of the market and manage your risk properly, you stand to make money. Having said that, there are some long term risks which I shall be discussing in some future posts.

Right now, there is problem of plenty- what to pick and what to dump?

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Categories: NIFTY Strategy
  1. Chandan
    Tuesday, September 22, 2009 at 5:59 pm

    Hold it above 61 it will go to 74-75.

    • omguruom
      Tuesday, September 22, 2009 at 10:40 pm

      Is there any trend that will help to go to that high level?

      • Tuesday, September 22, 2009 at 11:33 pm

        Your question is not clear to me.

      • omguruom
        Wednesday, September 23, 2009 at 12:35 pm

        I would like to ask that why the stock MIC will go to such high level?

      • Wednesday, September 23, 2009 at 10:54 pm

        MIC is still in a long term downtrend. In medium term the stock might rebound to 60.

  2. omguruom
    Tuesday, September 22, 2009 at 2:23 pm

    I have bought MIC 50@Rs58. What should I do? Is there any double digit growth in future?

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