Alok,
There are few things I wanted to say,
1. We are not in a bear market. That's why I don't think any rally here is a bear market rally. Nifty is going to make a new high this year and I strongly believe in this. The market would change it's stance from Bull to Bear when 4500 and more importantly (3900) get's taken out decisively.
2. TA assumes that the trend will continue in motion till signs emerge to suggest otherwise. As of now, there is nothing that suggests this. It is human tendency to get shaken up by such corrections and volatility. How much has been the rise since April and how much has been the correction recently ?? As traders and investors we should not draw conclusions so early.
3. What Dow is doing currently is completely different. They have a structure economic problem which is far from getting over. The recent changes in US policies do indicate that. Hence, before linking Dow with Nifty, we need to consider the economic structure of the countries in perspective. The transition of growth and benchmarking has to take place from the US to the Asian countries. Hence, the impact might be there initially, but It wont be a permanent one.
4. The RBI quarterly review released yesterday indicates that in our economic system, things are progressing well and though monitoring is still been done, there are no apparent signs of any weakness.
5. Technically Nifty has formed a high wave candle (indecision of movement) on Thursday and a strong hammer on Friday. Hence, clinging on to these levels is not such a bad idea. Volatility will be there and hence trader's should stay out. But, for long term portfolio, it is not a bad idea to accumulate stocks. If the market signals a bear move ahead, then we can liquidate always. But anticipating what the market is going to do is always fatal.
Tc.