Sunday Thoughts — What to do Now !!

The last 2 months have been very weird with markets where i have seen sentiments change drastically on either side.

1) ---- > Around December /January the only question was Should i buy X or Should i buy Y !!!! Whats a good long term buy at current levels.

2) ---- > Suddenly a crack to 16k or lower in late January the question was Should I exit ALL !!! Are we going to see 12k again ??

Have the fundamentals changed or its just the psychology !!!

My thoughts:

1) ---- > Around December/January although we continued to trade but the view was to increase cash and take some money of the table.

2) ---- > Once the markets started cracking towards 16k the view has been clear. Its a nice healthy correction and in a lighter vein Hangover of a BULL Party !!

Leveraged traders would have been hurt badly in this correction. But high risk traders always see extreme ends on their portfolio positions. Only way to get back would be going leveraged again after 2 weeks once the budget hungama is over. But remember next time around when the portfolio has turned good STOP LEVERAGE !!

For the smart trader/investor who has maintained our philosophy of not being leveraged the portfolios might be down 20% from the peak but still be way way better if you would have taken earlier trades.

Certain stocks are down 20-30% from the buying price ( we have had a few - Vimta,Eveready,DCB ) !! But look into the whole portfolio rather then a couple of stocks to have a better idea.

Should I average :

The personal view remains that index would not close below the 15300-15600 mark. So its simple if you have done right stock-picking and are convinced go ahead average on declines slowly. Start going leveraged closer to 15300-15600 range. ( Last time we did at 15300/16600 and it was fruitful)

The market can turn very sluggish and bearish only on closing below the 15300-15500 mark. If that happens personal view would be - EXIT ALL !!!

People will tell me why EXIT ALL at sub 15.3k and not Now.

The answer is simple the reason for me being INVESTED was that 15300 holds and we could see 17-18k over next few months. Now if 15.3k is not there i dunno where the market would go. When u dont know one should just GO 🙂

Above all EXIT on the portfolio doesnot stop me from buying back again maybe at a higher level ( 16.5k ) or at lower level ( 14k ). But again it keeps me comfortable and disciplined !!!

This is just a quick 10-15 minute post -- As when i write my Sunday Thoughts i dont stop so that there is no bias 🙂 but just clean technical thoughts !!!

No Sensex or stock specific updates as nothing much is happening and would wait for the budget to go.

Cheers !!!