Monday, 8 September 2008

Rally may not last long

Ajay Bagga CEO, Lotus India AMC, said the underlying economics or fundamentals are still quite rocky.

“I don’t expect this rally to last too long. It is a relief rally globally, and could take us higher. The fundamentals need to be worked out and that will take time. The credit and liquidity contraction that is happening can’t be whished away and that will take time to go away.”

"We may see little sideways action in coming weeks before the markets actually forms newer lows. We will retain our bearish stance unless the market crosses 4,650. Currently, the market is seeing a bounceback from 3,800. So, one leg down is still left. In the last 10-15 days, there has been a lot of selling by FIIs. After a strong lull, we are seeing renewed vigour coming into selling. The markets are completely in favour of a bearish set up. Right now, one should be very careful about any longs. Safer players may look at buying puts and the more adventurous ones can go for selling Nifty shorts."

DISCLAIMER: The author is not a registered stockbroker nor a registered advisor and does not give investment advice. His comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to buy or sell a stock, option, future, bond, commodity, index or any other financial instrument at any time. While he believes his statements to be true, they always depend on the reliability of his own credible sources. The author recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, before making any investment decisions, and that you confirm the facts on your own before making important investment commitments.