Anything Can Happen in Today's Market
Don't think about what the market's going to do; you have absolutely no control over that. Think about what you're going to do if it gets there
Guest Post: Deepak Singh Market Analyst, State of the Market
In current state of the market, one can justify anything. One can make a strong case for bulls OR bears with sound logic but does that matter? The answer is No. Technically, there is no doubt that market has made a sharp pullback from lows of 4500 all the way to 5150. But somehow, looking at the internals of the market - especially index stocks - I don't get a comforting feeling. It's all over the place. There are two reasons why I am little worried -
§ Market Lacks energy. There is just no enthusiasm to play on either side of the market. This can be clearly gauged by trading volumes on Friday and Monday.
§ There is no leadership in the market. Most of the sectors are making erratic moves. It clearly means lack of conviction and also lack of participation in the sectoral themes by the institutional crowd.
It is a difficult market environment and the best strategy = Not have any trading biases. In this way, one would be ready to take advantage of the moves market makes in either direction.
Today is a big day - Dr Reddy of RBI is set to announce monetary policy decision. This time we don't need any expert - we don't need to read between the lines. It's very simple - Is he going to raise rates by 25 bps or leave it unchanged? The market will react purely on face value of the news.
§ No Rate hike = Big Positive for the market.
§ Rate hike by 25 bps = Reaction???
It will be interesting to see how market reacts to RBI's policy decision. As a trader, it would be better to wait for market reaction than make one's own judgment on whether news flow is good or bad. Market can even go up on rate hike decision and one can give a justification that market is moving up on logic -"Rate hike cycle is over and event is out of the way". So be prepared - Anything can happen 