WE have Seen today the highest fall in the histroy of the Indian Stock Market - And It came like a bolt out of the blue - - meaning nobody expected it - so what ahead of us.
Why does the market correct so much ? Well the fundamentals havent changed for the markets to correct so much - well i have to say the fundamental were same a few months back as well
why did we run up like this - yes the interest rate cuts were one the reason - otherwise it is plain speculative activity with wholesale participation from the retail.
Me working in a brokerage house can sense the setiments of the retail people - most of whom missed the rally from 15000 to 18000 and they had entered at 18500 levels.
So any fall was meant as a buying opprtunity and they did make money twice when the markets fell by 1000 points only to gain back the points in a few days time.
Well this time as well the same people expected a rise after few days but are badly stuck in positions or exited in loss.
Ok now coming back to the situation what is ahead for us -
If you ask me - i would say to accumulate stocks - good quality stocks - let the markets correct doesnt matter - these are the stocks that will give you peace of mind and good returns in the years to come. Many may say "YEARS" is too long.
Again my advice - Hold stock with long term perspective you wont regret it - Enjoy the Indian Bull run which is not for 2 or 3 years but for 10-15 years.
So how does nifty look for us now. My view is that Nifty Spot Supports 5180 - 5080 - 4940 - 4740 - 4500 and thts where we will stop if the down trend continues.
And the uptrend will only occur if Nifty closes above 5445 spot.
For your reference i have put up a nifty chart from 3/4/2006 to 21/8/2008.
Happy Investing
