Indiainfoline - Investment Strategy

Gear up for a choppy week

The key indices have been rising without any meaningful breather for quite some time now. Relentless inflows from FIIs alone have been driving the rally on the back of robust economic expansion and stronger than expected earnings growth. The undertone remains positive as every major fall will see new foreign investors entering the market in place of the older ones. Even if there is a correction, which many analysts have been craving for, it may not be as bad as the carnage in May and June. We've seen in recent times that every time the market has fallen sharply, the bulls bounce back with renewed vigour. Those who have been left out of the recent rally are not getting any chance to enter as the momentum is just too strong. With the robust FII inflows continuing unabated all concerns over expensive valuations of Indian stocks are getting dissolved. However, we would advise you to not take large fresh positions at this juncture. Also, one should lock in some gains at every rise. As we approach the November F&O expiry, things could become more volatile. The market will take its cues from the rollover of derivative contracts into a new series. Things have been extremely choppy over the past few sessions. It won’t be any different for the coming week also. The long-term outlook remains intact. But, there will surely be some correction on the way, for which one should always remain on guard.