Market Musings 2

Sensex ( daily, 18 months)

We have been observing that buying on dips and staying invested would be a good strategy. That is working out fine for us. Liquidity flows are good. Indian economy has shown remarkable resilience and has started inching up. Markets are liking it. Price action suggests that. Some participants are wanting to take profits here because they feel markets could repeat 2008. I have a contrary opinion on that. I would not take profits yet. What ever happened in 2008 was a once in life time event. Events never repeat themselves, behaviours do. Firstly, greedy and unethical behaviour like that of Wall Street bankers may not recur for another ten years at least. Secondly, equity markets crashed due to cash crunch. We have no such worry in India. LIC alone is going to invest US $ 16 Billion this fiscal. That should take care of most FII outflows.

As far as charts are concerned I would not worry till weekly charts indicate a 'sell'. Be it on indices or individual charts. There are no such indications yet. So enjoy the bull run. Presently two blue chips are cheap. 1. Reliance Industries and 2. Bharti Airtel.

rgds
Vibhas