Is the Indian market getting overheated?
The market yesterday hit an all time high, the Nifty hitting 9,000 not closing above that but the bulls would take that. It was till an all time closing high for the market. The midcaps have been outperforming but honestly yesterday was the first sign of a bit of a distribution phase in the market because you saw some of the high beta names getting a bit sold off the likes of Unitech , GMR , Suzlon . At the same time the stocks like Nectar Lifesciences , Rasoya Protein , HFCL all these were gaining ground. So I don’t know -- the quality of the rally now is a bit in question.
Not the long-term rally of this market -- this is a big bull market, make no mistake about that. However, there is just way too much consensus now about 9,200 on the Nifty, there is way too much consensus about taking long position every day. So that I think is making me a bit nervous about the market. Foreign institutional investors (FIIs) continue to buy but domestic institutional investors (DIIs) have been selling and in the past whenever there has been four-five days of DII selling matched by FII buying, the markets normally correct after that. So , if I am using the same analogy, the market may correct a bit and it won’t hurt you -- if you were to just take your profits and sit on the sidelines for a bit, if you are a trader. From an investment point of view, this is the market in which you should not liquidate your positions. The best example is TVS Motors which had a 25 percent correction and is almost back where it belonged. In these cases, you use dips to buy and keep on accumulating your stocks in the long-term portfolios but for a short-term, if you are a trading position holder, do not short this market yet but maybe time has come to book some longs, wait on the sidelines and then look for a trend to emerge because as of now, there is just way too much bullishness on the street and there is just way too much consensus sometimes that can be a bit dangerous.
Happy Investing
Source: Moneycontrol.com
The market yesterday hit an all time high, the Nifty hitting 9,000 not closing above that but the bulls would take that. It was till an all time closing high for the market. The midcaps have been outperforming but honestly yesterday was the first sign of a bit of a distribution phase in the market because you saw some of the high beta names getting a bit sold off the likes of Unitech , GMR , Suzlon . At the same time the stocks like Nectar Lifesciences , Rasoya Protein , HFCL all these were gaining ground. So I don’t know -- the quality of the rally now is a bit in question.
Not the long-term rally of this market -- this is a big bull market, make no mistake about that. However, there is just way too much consensus now about 9,200 on the Nifty, there is way too much consensus about taking long position every day. So that I think is making me a bit nervous about the market. Foreign institutional investors (FIIs) continue to buy but domestic institutional investors (DIIs) have been selling and in the past whenever there has been four-five days of DII selling matched by FII buying, the markets normally correct after that. So , if I am using the same analogy, the market may correct a bit and it won’t hurt you -- if you were to just take your profits and sit on the sidelines for a bit, if you are a trader. From an investment point of view, this is the market in which you should not liquidate your positions. The best example is TVS Motors which had a 25 percent correction and is almost back where it belonged. In these cases, you use dips to buy and keep on accumulating your stocks in the long-term portfolios but for a short-term, if you are a trading position holder, do not short this market yet but maybe time has come to book some longs, wait on the sidelines and then look for a trend to emerge because as of now, there is just way too much bullishness on the street and there is just way too much consensus sometimes that can be a bit dangerous.
Happy Investing
Source: Moneycontrol.com
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