As you may have seen after the fed cut, period of volatility and uncertainty has set in. The market closed up the following day after the fed rate cut and then open higher again the following day. Optimism was sky high and i heard people saying that the worst is over. Disaster struck, and unfortunately the market closed down around 400 points, having intraday swing of over 1k points.
So then wat should one do in such volatile times. The acceptance that volatility will be the name of the game is a must. The global scenario will take sometime to settle, if at all it settles. The US govt and Fed are trying to do their best to stem the downtrend. The us govt has announced some stimulus pakage for the financial institutions and there is hope that FED may cut the interest rates by another 25bps. The analyst community is divided over these measures. Some say, the mess is too big to be contained and that making credit available easy is not the solution. The bulls and the hopefulls, think that these measures may atleast revive the economy. The financial markets and time will decide who is right.
The volatility in your markets has given a wonderful oppurtunity to do short term trades. As i had mentioned earlier, one needs to divide the portfolio into short term and long term. The long term Indian story is still strong but maybe dented if the global economic crisis continues. I still belive that the pain is not over as yet. For the long term side of the portfolio there is nothing to worry about. For the short term, one will need to be flexible and nimble. Be cautious before creating any fresh longterm positions, keep holding what you have widout panicking.
I had given a call to buy gmr infra during the panic selling which happened. I would advise you to sell half of your holdings at around 190-194 range as there will be resistance there. The profit percentage stands at around 30-40% depending on the levels bought.
Have a great weekend.
So then wat should one do in such volatile times. The acceptance that volatility will be the name of the game is a must. The global scenario will take sometime to settle, if at all it settles. The US govt and Fed are trying to do their best to stem the downtrend. The us govt has announced some stimulus pakage for the financial institutions and there is hope that FED may cut the interest rates by another 25bps. The analyst community is divided over these measures. Some say, the mess is too big to be contained and that making credit available easy is not the solution. The bulls and the hopefulls, think that these measures may atleast revive the economy. The financial markets and time will decide who is right.
The volatility in your markets has given a wonderful oppurtunity to do short term trades. As i had mentioned earlier, one needs to divide the portfolio into short term and long term. The long term Indian story is still strong but maybe dented if the global economic crisis continues. I still belive that the pain is not over as yet. For the long term side of the portfolio there is nothing to worry about. For the short term, one will need to be flexible and nimble. Be cautious before creating any fresh longterm positions, keep holding what you have widout panicking.
I had given a call to buy gmr infra during the panic selling which happened. I would advise you to sell half of your holdings at around 190-194 range as there will be resistance there. The profit percentage stands at around 30-40% depending on the levels bought.
Have a great weekend.
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