Could the market sustain the increase?

Rajesh Sharma

Could the market sustain the increase?

The market has been highly unstable for a long time. However, it was continuously going down for a few months with some exception of increase for a day or two. This phenomenon is the result of immaturity on the part of investors and domination of traders. We behave in a very emotional manner and lack ability to rationalize new developments. Gut feelings, believing in luck and making decisions influenced by rumors are a few characteristics of us.

However, this depressed phase of a longer time period has, perhaps, compelled to leave the market for quite a good number of small investors and also it downsized the influence of some BIG names. The downward journey of the market has inflicted injuries to many. Now, who are still surviving, they have plenty of experiences. We have seen ups a few months ago and downs recently and most importantly, we survived to see happenings of today. In this time of "survival of fittest", we must have some strong qualities and are buying and selling now.

The external factors including macro-economic fundamentals and company performances are not bad. Even, they are far better than previous years. The political drama alone may play negative or positive as the parties and leaders are unprofessional, unpredictable and self-serving. Anyway, now, they are also pressurized from all corners and they have no escape route. In Magh 8 or after some months, they must complete the constitution writing task. Now, the Indian line is clear - you got already what you wanted in this fluid situation, institutionalize the gains by getting further endorsement from a more stronger authority in Nepal. Hence, the constitution and a national unity government afterward sound logical now.

Therefore, I believe that the increase that we have seen is not only sustainable, it will move up much higher. May be, tomorrow or day after, we can not say; but on week to week basis. it may go up and up. However, the gradual and slower pace of increase is much better and sustainable.

In this phase of upward movement too, we should not be color blind. We have to select the companies to trade on or to invest carefully.