Markets: The final capitulation?

Action has shifted in a strong way to the mid and small cap segments. This is usually the last leg of any bull run. We are by no means suggesting that markets will not head higher. In fact contrary to the rather cautious approach of many market participants, we have been advocating a bullish outlook for quite sometime and continue to do so. In fact we still believe that there is some upside left before a meaningful correction sets in. This last leg is most likely to see an all around participation from various sectors and segments resulting in euphoria. In these expected jubilant times retail investors who have been extremely cautious so far and booking profits on every rise will be compelled to turn reckless and return to the markets in a furious and aggressive way.

For alert and nimble investors the next couple of weeks are likely to generate many short term profit making opportunities. Keep identifying stocks and sectors which offer value and have not participated so far. An active flipping can generate enormous returns. This strategy is needless to say not suited for conservative investors.

For passive investors a good exit opportunity will come when the markets go into frenzy. Though no certainty can ever be built into predictions of market sentiments, yet we estimate that this frenzy period is likely to happen in the next couple of weeks.

So get ready to take off and take advantage of the impending hurricane in whichever way you can.