- Wealth PMS (50L+)
Once in a while you see a signal. Of euphoria, or panic. This time I’m seeing it again – the euphoria. It’s a great trading move – the Nifty and Sensex are at one year highs, the S&P 500 (US) has crossed 1000, and every market in the world is celebrating.
A lot of us have missed the bus. I have, willingly, as I cannot trade due to my job. And this is a trading market. What will follow, likely is a great trading move. In either, or more likely, both directions. So buckle up.
The fundamentals aren’t there yet. The Q1 results are good, no doubt, but nearly all of them have that feeling of one-time income around them. From DLF’s emergency sale proceeds, to ICICI’s surge in trading income while dropping regular business. So we gotta wait till the economy surely shows signs – and it will be the shortest downturn I have ever seen, if it is truly a turnaround. I’m skeptical, and willing to wait out a few months before I truly declare I was an idiot for waiting a few months.
Prices, meanwhile, dictate trading. And prices are declaring a bullish sentiment. If I were trading, I’d go with the flow – run it up, ride it up, keep a strict stop loss and remember to short the son-of-a-bitch on the way down. Oh, it’s going to be a fun ride; I participated the last time, I won’t this time.
What I would do is to watch carefully why the top line stocks like RIL and ICICI aren’t making new highs and slowing down on volume, while the mid-caps hit their peaks. Accumulation in the midcaps, distribution in the large caps? That is not a good sign, but surely a sign of a great trading move.