Since the breakout of the support level at 1,350, Mr Bull went into recess while Mr Bear took the cen­ter-stage. Talk of the town moved from “long correc­tion” to “bearish”. The panic sell that started on February 28 chugged along on its southbound track. There were small respites on March 6-7 and March 13-15 periods. The bearish sentiments of the market were further veri­fied when the gains made in these short-lived bounce­backs were completely wiped out within a single day’s trading on March 11 (wiping out the gains made on March 6-7) and March 18 (wiping out the gains made on bounceback rally of March 13-15).

 

The southbound move­ment reignited on March 18 continued without any pull-ups for more than a week. Interestingly, the volume traded started to increase after the dip on March 19 (Rs 256 million), reaching Rs 493 million on March 28.

 

This indicated increase in buying interest in the sell­er-dominated market. Peo­ple start see each and every scrip as cheap and heavily discounted. The market consists of the traders and the investors. For the trad­ers, the current market is giving lesser opportunities for quick gains. But, the investors, who have the patience to stay the course for one to two years, are having a field day choosing fundamentally strong and undervalued scrip. If we do proper financial analysis, we can now find many scrips with considerably good EPS (earning per share) with lesser PE ratio (price-earn­ings ratio) which are simply begging to be accumulated. Mr. Bear might continue to have the center stage, mak­ing the majority fearful. But the smarter few will start being greedy and start accu­mulating for the long haul.  

 

By MANIL SHRESTHA