Today we will review the possible outcome of the general elections. To me it looks apparent that BJP + Congress will get just around 230 / 240 seats throwing open all kind of possibilities. No other single block like CPI / CPM, SP , BSP, RJD + LJP + NCP will get more than 40 seats.
So I feel the third front supported by Congress or Congress + third front ( with a different leader than manmohan ) are the possible governments. Some quarters are speculating over Chiddu ( though I have my own reservations beause of left parties ) as a possible front runner if congress will lead the government. If the third front will form the government with congress support – the leader could be anyone and name of Sharad Pawar can not be ruled out.
Fortunately 16th may is a Saturday – otherwise we would have had two lower circuits ( 10% + 5% ) for sure. 48 hours are not going to be enough to have clarity about the form of the government that we will have and I will envisage a 10% circuit or closer on Monday 18th morning.
As usual many pivotals will take deep cuts but momentum brigade will be massacred again.
The scenario described above does not warrant anyone to hold long term investments as CASH WILL BE KING. May be I will be wrong but the form of the government is definitely not going to be such as to spark a strong rally. So if you have moved to cash – you will definitely get an opportunity to get back in to the market at similar or even slightly lower levels.
I ALWAYS PREFER TO ERR ON THE SIDE OF CAUTION AND STRONGLY RECOMMEND MOVING TO CASH.
SO, TRADE WITH ABUNDANT CAUTION AND KEEP MOVING TO CASH.
Please remember CAPITAL is always scarce and needs to be respected.
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