What next in the market? – Better wait & watch for clear direction!!!

On Monday, Indian market movement was as expected by us and as per our suggestion we expect our subscribers must have exited Nifty SHORT or PUT option already.

Market opened up with large gap up and closed more than 5-6% upside. Now everything depends on what is going to happen on Tuesday, if global market maintains the same positive momentum on Tuesday then we can see a brief rally of 10-15% upside (Nifty 3700-3800 at most) and after that market will realize the real problem in the economy which can’t be solved by government’s intervention and it will start falling. One can see a temporary bottom for Nifty around 3000 but it will take a month or more to hit 3000 level. We will be just bouncing back between 3200 and 3800 levels of Nifty for next couple of weeks.

$700bn bailout is nothing in front of European governments $2 trillion. There was a lot of noise for $700bn bailout, but did anyone say anything on $2 trillion bailout by euro zone? Guys, this economic crisis is spreading and we believe more than US it is Europe who will be impact and the complete effect is yet to be seen. Since the credit crisis burst onto the global scene approximately 14 months ago, each new government counter measure seems to have backfired and this meeting of G7 will be yet another failed approach to solve the crisis which can be solved by only TIME.

What shall we do now? – Better wait & watch for clear direction!!!

1. We would suggest it is better to wait and watch on Tuesday, because we are expecting another 2-3% upside on Tuesday and that would be the end of bounce which is mostly driven by short covering. If Indian market closes flat on Tuesday one can very well start building SHORT Position. Once we see market peaking out, we will keep you informed so that you can build SHORT/PUT positions.
2. We do not recommend any LONG pr CALL Option as of now. Although the upside is unlimited as of now but sentiments are down and it takes time to build the sentiments of a trader but it takes just a few minute to break the sentiments. So, it would not be advisable to go LONG now.
3. Long term invests can continue accumulating 10in3 stocks but they need not worry after seeing these rallies and thinking that they missed the life time opportunity. Note our words you will get better opportunity or better price to invest within next couple of months. So accumulate slowly and steady every month systematically.

- HBJ Capital Team