The markets have gone up too fast in too short span of time. A lot of positive triggers came like Greece issue settlement and oil coming down or hopes of both. To be honest it looked like people were looking for an excuse to buy into the markets and these two things were key to the upside. Our markets were capped for a very long time and people were dying to make money from it now. However what now? The markets are already quite high from those lows. We’re up 400 points on the nifty in 6 trading sessions. Even if one looks today the fall came from the key large index stocks whereas the breadth remain positive with midcaps and smallcaps closing high.

It is time we take the wait and watch approach. June or July inflation numbers are both expected to remain high and thus we do not have any trigger from our own side and thus whatever trigger is coming, is from the global side. So we can assume that in future if buying has exhausted then people might resolve back to profit booking. One only needs a couple of negative surprises and it is all over. As it is a lot of people have made quite some money in a very short span of time and so they might not hesitate to sell them all. However I feel that since we have shown so much positivity lately that this action might continue for a bit of time before we see the fall again. First quarter numbers will remain a key trigger on either side for the markets.

The most important part is that I am not recommending any kind of long term buying at current levels because I am sure that we will again see lower levels where one can initiate a buying from a long term perspective. For now the short term traders can play in the markets but long term investors kindly wait on sidelines for better levels to invest. For short term investors, if the markets run up further like betweek 5700 – 5800, one can start looking at slowly exiting the markets and wait for lower levels to buy again. For long term investors, they can remain invested in the markets as the outlook is still positive in the long run. The prices of commodities are expected to come down eventually and the inflation might as well peak out and so will the RBI hikes, thus we’re still positive on the market and expect a bull run late in the year to next year beginning.

In short, avoid investing at current levels and wait for next downside in the markets. One can start accumulating the stocks that are bottoming out when markets again trade around 5350 or 5200 levels. Nothing has changed significantly on the macro side and thus another fall is very likely. Key risks to downside remains auto sales numbers, inflation figures, IIP data and anything wrong on the global side. But long term trend still intact.

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3. My Views On The Market
4. Time To Start Buying Stocks?
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