The market seems already digested the Gap up 2100 points in sensex ,the biggest gain ever in stockmarket in one day.We all analysts are left wondering defience of natural laws of Technical analysis...namely the gap filling preceeding a gap up.Nifty just hovered around the top with minor profit booking and now back to business of surprising the market yet more.

29 May Nifty closing has been very strong , implying strong momentum that can jack up nifty into yet another higher level. The extent can not be calculated but if we remain invested with the trend, we surely be rewarded.So i become more confident to hypothesis i proposed to follow in last blog.

Now as we move higher, the risk for new entrant becomes more in scrips/share which have already run up a lot( those which led the rally) . only professional traders can dare with strict stop losses in place.

Some opportunities definately exist in mid cap and small cap segments, after a careful slection entry can be executed to take advantage of the market momentum develped right now.

In large cap segment sector laggards can be bought too with adding more volumes in current portfolio stocks( profit earned stocks already bought takes care of risk associated with new purchases)

Stock Markets are more about managing risk of our capital exposed than spotting big profit pockets available, once we have ensured enough safty, we will make profits.

One more thing is being under confirmation beam light is emergence of financial markets out of woods though its too early to finally conclude,sustained resilience in next few months will increase the likelyhood. Commodities markets growth in last 6weeks confirmed increasing demand, another positive indicator for better health of stockmarkets, though US dollar weakening is a cause of concern.

I would advocate taking help of a qualified exeperienced advisor if you are investing large amounts, it is better to pay consultancy charges ( Its a small percentage like brokerage charges) than to lose money and repent in frustation and finally blame stockmarkets for your mistakes(lack of decipline, Fear and Greed to name a few). After all we cant be our own doctors and need an experienced doctor to avoid any health mishaps and preventive care to be observed under advice of an expert on day to day basis.

More another time

Happy Stock Investing

SAM