Critical days ahead.....

I know many of my readers do wait to read my posts here. I am sorry to them that I am writing after 7 days. Actually I was busy with my new broking business......

For the last many days, there has been an absolute mad rally in global markets. S&P and Dow are up by more than 15% from their recent lows. Asia, Europe and Bric countries have also been enjoying this upmove. India has benefitted a lot from this, though much of it can be attributed to mere short covering. But during the process of recovery, it crossed a few stiff hurdles and hit the 2830 resistance zone in spot Nifty. Now a short covering of almost 300 points in a 7 days is not a small thing. But few points may be noted.
1. FII's been constantly on the sell mode.
2. DII's buying in view of financial year ending adjustments.

Now the question is how long?
The answer can be given in 2 ways.....
1. Since all have been short on the market or rather pessimistic, some smart money will flow in and take the index away from anyone's reach to create a retail trap.
2. If 2830 on spot Nifty is not broken and considering an overbought market, a correction will take place.

Frankly speaking, I didnot expect this massive short covering so early. I got myself on the wrong side. But the way, these small caps and mid caps been rallying is defintely a matter of concern......Investors should not get carried away and start investing in full blow. Rather they should trade this volatility and invest over a 6-10 months horizon. Maybe a much better picture will come up in next 2 days which should be critical.