Not out of the woods yet
After a rather weak and jittery 2 weeks, we have had a nice rally all across the board. The FTSE, Dow, Bovespa, HSI and the Sensex all made signifcant highs while the Nikkei was marginally high.
Does this mean that this is a time to buy?
As we know, whenever we have a downturn, the markets always build a base. As we haven't built a base yet, it's still not a time to turn bullish. It will be interesting to see what happens in the pull back. Will the prior lows hold or will we go onto breach those lows.
As we had noted that this week we will probably be marginally higher, we were off by a small %. However the nature of the rally has been ferocious.
At this point, inspite of the good picture all around, we will continue to exercise caution and still believe that we should breach those prior lows and build a base. From a medium to long term perspective, it will be good for us to have a little more correction before the bull run commences. Else we will have a suspect rally which has a higher chance of failure.
