Can India be immune to what is happening elsewhere in the world? The answer is a resounding no. Last week the benchmark index or the “Sensitive Index of the Bombay Stock Exchange” crashed to 10,239. bloodbath This level is about 2,000 points below my target for the index (I had written that we will see 12,200 when the index was above 21,000 earlier this year)

The question uppermost on people’s mind now is whether we will get a recovery, and if we do get one, will it be sustained. I can answer the second question with more confidence. The answer is No. If we get a bounce for some reason towards 12,000 we should look to lighten any outstanding long positions so that we can buy on the next dip. We should also not forget that two or three years from now, once all this mess is forgotten, the levels we are currently seeing could appear to be a once-in-a-lifetime opportunity. But if you are planning to enter the market with that kind of an outlook, then you should be buying in stages, rather than selling out on recoveries. Trading and investing are two different things altogether. Anyway, here is a chart of the BSE. bse-12-oct-08 Use it as another tool in your decision making. Good luck!