Market is taking one step forward and two steps backward. It just doesn’t want to go up. We are back at 7800, the same level market closed a month ago on 24 August 2015.
You can either choose to be negative or take this as an opportunity to keep buying on dips. Contrary to what you might like to believe, people have made lot of money last 4 weeks by playing the market wisely and with conviction.
The only conviction that you need to have in this market is, “Market is in an extreme volatile zone. Volatility is going to become norm and not exception.” You would have noticed that market bounced back by 500 points from its low of 7500 before retracing once again yesterday.
This market is now what you call a trader’s paradise. People who do high frequency trading with a large spectrum of shares are raking in moolah. Banks, Financial sector and Pharma have bounced back strongly. On a rough estimate people have made an average of 10% in last one 4 weeks. This is mind-boggling considering the fact that it has been the most bearish period in many years.
How do I play the market from here?
This is the time to go on bargain hunting. Just because market is in negative environment, it doesn’t mean there aren’t money-making opportunities available for investors. There are a lot of stocks like Motherson Sumi which are crying to be bought. Market will reward the brave and will punish the weak. This is also the basic of human evolution. Your ability to compete and survive will decide your future in stock market. Remember when a tiger is chasing you, you don’t have to be the fastest runner in the group, you just need to be faster than the slowest runner in the group.