Intermediate trend turns negative

The intermediate trend has turned negative after the continuous fall in indices over the last couple of days. This intermediate downturn is presenting a good buying opportunity to investors who had earlier missed out on the rally from the March Lows. Buying may be concentrated more on high growth sectors like metals, banking, automobiles and IT as they are likely to rebound faster once the sentiment turns positive again. At the same time buying may be staggered over the next couple of weeks as we can expect this consolidation phase to last for sometime and indices are likely to seek lower levels in this period. Three things which investors may like to watch out for while buying for the long run are the growth indicators of domestic economy, strength of the Indian Rupee and the buoyant global risk appetite which is resulting in a robust inflow of money into our markets. A significant deterioration in any of the above factors has the potential to terminate this bull market prematurely. So while buying is recommended as the forecast of our economy and global liquidity conditions are both optimistic, investors and traders would do well to carefully keep monitoring key global and domestic data to spot any secular change in the overall trend early.