Flaring Sentiments: Risky Avenue

Signalling might be a reflection of sentiments but it certainly isn't always the rational thing to do. The recent rally in the Sensex and the push to 14000+ does not mean that we have beaten recession and things will be OK overnight.

This sentiment is a mere reflection of the modjo built up around the election results that met street expectations. If you have already not been a part of this rally, now is certainly not the time to enter and take fresh positions. Even if you were a part of the rally before it started, we suggest that you book profits and exit or keep a minimal exposure. The markets are expected to be range bound between 12000 to 14000 though there are chances that it may scale 15000+ for a very short duration.

We suggest that you remain invested at least for 18 months if you are taking fresh positions in stocks that have recently shot up by more than 20%. One can expect a return between 22-27 percent for a period of 18 months.