Yesterday, all of a sudden some of the technical experts started saying that market correction is over while Friday they were telling that market will test the recent lows. What made them to give such calls in a hurry? Is it that market zoomed over 500 points all of a sudden? Is it the continuation of the rally for the second day made them to rush to the TV channels or suddenly everything has changed across the globe through some black magic?
Well, I don’t have any answer. One of the leading technical analyst said that text book technical analysis doesn't work for Indian markets. I guess he would update his 'text book' soon to add this new Indian stock market theory. He was bearish and recommended to go short at Nifty 5400 and on Monday morning giving recommendations to go long that too in the morning!!! Market came down in the afternoon by over 300 points again proving that his new Indian stock market theory is not working. Well, if technical analysis works that way in India I don’t want to follow that any more.
The Indian decoupling theory is failing miserably and intelligent investors are aware of this. One end we are talking about globalization and other end we are trying to prove the India decouple theory. This is the greatest Indian market paradox.
US markets were weak on Monday and Indian markets are expected to remain weak today. I am not sure about the market direction and hence would not bet on bull market or bear market. As far as I am concerned, I have identified good stocks from investment and trading perspective and I am not too worried about the theories at this moment. Any theory will work for me as long as I have some cash flow into my account at the end of the day!
If I would trade, I would go long on Indian bank, Karnataka bank, Sun pharma and Reliance communications but not at the current price. I would wait the price to come down a bit and then only will take the call. As usual I would be trading with a strict stop loss as I would like to retain my capital for tomorrow as well.
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