What is your stock market view for 07th September and do you suggest that I should book profits in Reliance Industries and wait for lower levels now?

If the previous week belonged to Reliance, then it was the turn of IT stocks to take over on Monday 07 September. Of course, has closed near to Rs.2,425 and close to our old target of Rs.2,500. The rally has been amazing, gaining about 23% since January. So, it is certainly a good time from your portfolio perspective to take some profits off the table.

But, let me get back to the IT story for Monday. The top gainers were dominated by technology stocks like Wipro, HCL Tech and Infosys. There was lot of enthusiasm on hopes that technology spending by global firms will remain buoyant in the coming year too. However, there was some tempering in oil stocks and banking stocks on Monday.

I would suggest that you closely track the VIX, which has rallied sharply in the recent past. IT is also called the Fear Index and that has rallied in the past 1 month from 12.5 to 15.3. The caution is evident from the fact that the recent really in the Nifty has been accompanied by a sharp spike in VIX. Any VIX level above 18 makes the market vulnerable.

Institutional action was relatively tepid on Monday with FIIs net selling worth Rs.589 crore on Monday and domestic institutions buying Rs.547 crore. Global markets have not been too decisive with the Dow lower on jobs data worries and the NASDAQ holding up. The SGX is marginally lower in early trades on Tuesday. Be prepared for more cautious approach.