An unfortunate terror attack on our forces followed by precise retaliatory strikes and a Hero's welcome to an Airman who brought down an F-16 and was a PoW for a brief period! One month is a very long time for the markets and the geo-political scenario in the sub-continent.The markets changed tracks and now we are looking at a rally even in the mid and small caps as well. The Sensex has wallowed in the sub-35500 zone for a very long time and the rally from that zone will run out of steam soon.
From being bearish on the markets one month ago, my outlook has changed to cautiously bearish.The indices are closer to the resistances now and it will not be advisable to remain long or initiate fresh longs at the current levels. Its better to be on the sidelines than to be caught with long positions when the tide changes.
To put it bluntly, its too early to factor in the election results on the basis of the events of the last one-month and go long blindly.