I do not think there will be a large market crash in next couple of months. On a longer term, the markets can make new highs (NIFTY can touch 6420 and SENSEX can touch 21400).
However, I think that in recent future of few weeks, NIFTY can correct to around 5940 (SENSEX - 19800) and be range bound for some amount of time. I also suspect that several companies will not post good Q2 results and FIIs are getting a bit tired of investing and will certainly pull out a large chunk of money out before end of the year (December 2010). So time to be cautious and book those notional profits and get your money, as I had been saying repeatedly.
If you are into equity linked savings or insurance schemes (ELSS) and has the option of switching investment mode, it is better to switch-over 70% of your ULIP or other flexible ELSS policies from equity to debt mode and keep the rest in equity mode in order to make the best use of market conditions, if I am proved wrong.
You can also buy Gold based funds (like Kotak Gold ETFs…ETF means exchange traded funds). Gold will cross USD 1450 per ounce and gold funds will provide you with a steady income, in spite of market consolidations.
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