Tuesday, March 25, 2008

Indices doing a Last Gasp Rally (LGR)? - A suggested Strategy

Check out my post on Money Control some days back - Last Gasp Rally

Extract below :-

" I believe we are at the beginning of a bear phase. Any rallies would be short lived.

There is a small chance that there might be one 'last last gasp' rally which might go upto 18K.

..............And I still hold that:-

- We are following the US with a 6 months lag

- Sensex likely to breach the 10K mark too in the next 18 months period.....and likely to go up to 40K (min 25K) by Sept 2013 and 80K (min 45K) by 2016. "

Could this be the last gasp rally (LGR) or has the LGR already happened..?

Suggested Strategy:-

- This is a time to accumulate for long term. And in my opinion, for super normal returns in equities , long term is 7 years.

- If you are making a 'decent' profit for recent purchases, utilize any relief rallies like these to sell off and book profit. My last set of purchases were at 15.5 K levels. Will sell of at 17K cross over. Else will hold for 7 years...!

- Accumulation strategy
  •  invest 25% at 15 breach
  • 50% when the market breaches 12k
  • Remaining 25% at 10 breach.
  • Buy only blue chips.
  • Any monthly savings to be held off and invested at 12 and 10 breach.