Nifty 50 is at 11,342 levels is it the right time to sit back and relax or get your game mode on.
Second half of 2020 has made us realize that the markets sharp correction in February was right and indeed it’s being reflected in the financial results of the companies with most of the companies across sectors reporting a loss of revenue and other losses due to unforeseen circumstances caused due to Covid 19 .
Could this be hints that companies which saw massive increase in their stock prices have could be well adjust to the results.
If we speak about the ground reality and situation in Indian stock market does not seem to be any less than a mirage with consistant rise in cases to cases rising up to 60,000-65,000 a day with if the current rate of COVID-19 cases does not decrease we could certainly be pushed into another lockdown . Which would translate directly to rising fear in the market which could set of another crash.
If Things Were To Go South What Is Your Back Up Plan
In a normal scenario it would be smart to be invested in the stock market after a crash but Covid-19 has turned the tables completely with showing how volatility in market can be a perfect recipe for a bull run with one of the fastest recovery in any of the crashes in history.
We at Stocks Khareedo would suggest keeping cash reserves in case of crash and deploying it steadily instead of going all in after the crashes. As fear would set in the market after seeing a second market crash it would mean markets not recovering as quickly as we saw in the first half of 2020. Which could mean market having some hiccups before going back to the earlier highs.
For the time being the right strategy could be sitting back and taking a swing trading approach looking for the short term opportunities and following the weekly recommendations. Although long term opportunities could show up in specifically pharma sector if a vaccine is developed which could also mean market not crashing at all and keeping its gains .