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NIFTY Outlook

Friday, October 23, 2009 Leave a comment Go to comments

As expected, the correction was sharp and NIFTY tested 4980 on the downside. It is a bit difficult to say if this correction will take us to 4900 or if we will stay in the 5000-5200 range.  If we close today on a strong footing, then the chances of taking out the previous highs become very strong.

The best deal would be to stay in the range and then move up sometime in mid November to have a go at 5400-5600 range. If we break below 4750, then there would be a serious damage to the current uptrend.

It will be prudent to book partial profits in scrips where we have seen 20-30% gain in last 1-2 months. Banking stocks for instance have moved up very sharply in last month and one needs to add these only on sharp corrections. In the long term, these stocks might go even higher.

Talking of stocks- DLF had a spectacular move up and down.I booked some short term profits but am still riding the stock for slightly longer term gains. Cairn India is another stock that I feel is ripe for some good moves.I am also accumulating RIL (although very small quantity) at the current levels.

I am also finding a lot of mid and small caps that look ripe for some big moves in the future. If you stick to quality and do your research, there is still money to made in this space. At the same time, one has to be very cautious while picking stuff in this space.

Another point to keep in mind is that stocks never go up in a straight line. Corrections are part of the game and one needs to learn to live with them (however painful they might feel).

If you still feel uncomfortable with corrections, read this old post of mine and have the right perspective –” Do you want your stocks to go up everyday?”

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