Well the cold wave is also hitting Indian markets here. How lower do you see Indian indices slipping?
The markets are poised to go quite a bit lower but it may not be immediate. Right now the 17,780 support is the important level we are watching in the market. There are two possibilities here either the market sees extreme short term low, slightly below 17790, or it will bounce up to somewhere close to about 18,300 and then pick a sharper fall.
So you know the best thing investors and traders can do is definitely have some put protection somewhere between now and February. The rally that could come in the extreme short term could be a pre-budget rally and the market could sell off post the budget.
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Let me talk to you about both the parts of the market. Should people who are short start covering their positions? It is not that people are not making money, market may be slipping but the bears are making a lot of money. What would your advice be, to start covering or not yet?
Definitely cover some portion but do not cover the entire portion because it is difficult to now completely come to the conclusion that we are going to see a huge rise. But definitely leave some part of your short position and at the same time cover partially. I think I outlined just a few moments ago I am not sure which way the market is going to take, but definitely the overall outlook is bearish.
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