Most of the people hate stock market because of its volatility and uncertainty. Now the stock market is entering into that phase. There are so many events lined up , global as well as local. One of the most important event " Loksabha election result" will come in next few days. Because of that market can be very volatile. If you are on right side of the market then you will earn huge profits or vice versa. To be very frank election results impact will be very short term in nature, may be a quarter or two.
Ultimately market follows fundamentals. Stock market is function of corporate profits, if earnings are not catching up we will not see capital appreciation either. Analysts are expecting earnings growth since last 3-4 years but we have not seen much improvement in earnings. Market has gone up just because of liquidity. Since last 4 years NIFTY EPS is just moving in the range of 390-410. Any negative news can take market down heavily. It can be Local or Global. It can be Election results or US-China trade war or Brexit or anything else. Always remember fear is always greater than greed. So stock market falls are always faster than rallies. If we preserve our capital in these falls then only we can enjoy the up move of the market.
Right now market has discounted that NDA will form the govt. If actual results deviate from this then volatility will increase. So one should book partial profits and exit 50% stock portfolio before election results. If NDA forms the govt and Nifty goes above 11800-12000 levels then book full profits and wait for correction. If NDA wont come to power, one should book profits and wait for more correction.
On Technical front, momentum indicators are giving negative diversions on Daily, Weekly and Monthly charts. Major Support for NIFTY is around 11000-11100.Major resistance will come around 11800-12000.
To conclude, any rally must be used to book profits and wait for correction.The correction can be price-wise or time-wise. In short Long term bull run in Indian economy is still intact but we can't ignore short term correction. Happy Investing!!!!
Ultimately market follows fundamentals. Stock market is function of corporate profits, if earnings are not catching up we will not see capital appreciation either. Analysts are expecting earnings growth since last 3-4 years but we have not seen much improvement in earnings. Market has gone up just because of liquidity. Since last 4 years NIFTY EPS is just moving in the range of 390-410. Any negative news can take market down heavily. It can be Local or Global. It can be Election results or US-China trade war or Brexit or anything else. Always remember fear is always greater than greed. So stock market falls are always faster than rallies. If we preserve our capital in these falls then only we can enjoy the up move of the market.
Right now market has discounted that NDA will form the govt. If actual results deviate from this then volatility will increase. So one should book partial profits and exit 50% stock portfolio before election results. If NDA forms the govt and Nifty goes above 11800-12000 levels then book full profits and wait for correction. If NDA wont come to power, one should book profits and wait for more correction.
On Technical front, momentum indicators are giving negative diversions on Daily, Weekly and Monthly charts. Major Support for NIFTY is around 11000-11100.Major resistance will come around 11800-12000.
To conclude, any rally must be used to book profits and wait for correction.The correction can be price-wise or time-wise. In short Long term bull run in Indian economy is still intact but we can't ignore short term correction. Happy Investing!!!!
