Should you buy stocks now at these levels?

Stock markets have bounced back on account of short covering. Do not make a mistake of taking this as an end of correction. Here is my understanding of what I interpret by looking at SENSEX.

For last 3 trading sessions, SENSEX was trading around 18,000 levels. Although it almost touched 18,000 but did not go below that. Yesterday, i.e. on 2nd February, stock market bounced back by more than 300 points due to short covering. Looking at below chart for SENSEX over the period of 1 year, we may interpret that 18,000 looks like strong level to breach, but hold on to this thought and have a look at second chart below.


Now look at below chart. After 18,000 levels, broadly, I can see the range of 16,000 to 18,000 with support to markets. I strongly believe that there is good scope for market to correct further in net few weeks/months before it again resumes it's uptrend. It will long time before this happens.


At this stage, don't be in hurry to buy stocks for your long term investment portfolio. Wait and watch should be our mantra for some time.