Whatever the future holds and howsoever be the rise in GDP for India, the markets which gradually advance are considered good. Unlike the case of Sensex (please see below), which has dramatically risen and has made everyone feel left-out of the current rally.
But are we really left out? I don't think so!!! The current rally is due to avalanche of FII flows. This is temporary situation. FII's will rush-in tamper the gradual rally increase the prices of stocks, book profits and rush-out. Its a no strange phenomenon with Indian market!!
But don't get spurred by the rally - and this is mainly for those uninformed small investors!!! As mentioned in one of my earlier post (dated 21st September 2010) that "the current FII rush has taken the
valuations to a higher level and may be even ahead of fundamentals, like it happens in every bull rally. The journey could continue for a
while but will not be able to sustain, for sure!!" Additionally, I had also "recommended long term investors to
have control on emotions and stay on side lines - even if the stocks
move higher for a while. Because getting in now might be injurious for
wealth!!"
I continue to believe that Sensex is (still) trading at overbought levels. The index is looking expensive from the point of market strength - RSI. Additionally, it can also be seen (from below graph) that index is trading at the upper level of bollinger bands.
So what does all this boils down to? It concludes that the Index is really expensive (from every angle). Once should wait for a correction before re-entering.
Happy Investing!!!
Data: Bloomberg; Wealthy Opinions
No comments:
Post a Comment