Chemical stocks, most of them seem to be in bottoming out phase. Whether its for longer term or just a tradeable bounce is difficult to make out at this point of time. In the initial phase of a bull run move, there is a lot of to and fro movement, range bound movement, which is often frustrating to an investor/trader. The feeling is that there is no momentum. Once stock price rises strongly with big volumes and clears previous resistances convincingly, momentum will return.
It’s up to us whether to enter early and wait longer or enter late (but with slightly higher risk as if the move fails, you have to be nimble enough to get out) and be satisfied with lower returns.
In pharma sector its not possible to paint all stocks with same brush. Lot of large caps have crossed their all time highs. Some stocks esp the bulk drug companies are in bottoming phase.
Regarding the second group of stocks you mention, currently there is strong momentum still present in the fancied names and sectors. If you can catch the moves and exit in time, there is still money to be made. But one has to be mindful that once an upmove comes to an end and correction begins it is often painful.
Best choice for an investor would be to go for a combination of two approaches, which is keep riding momentum stocks and look out for suitable exits, plus look at stocks which are showing bottoming formations and offer low risk entry points. Often these latter stocks and sectors are the ones that could turn out to be fancied sectors of next bull run.
I have seen a lot of investors indulge in the endless (and often useless) debate of Nifty having gone up too much. It can still go higher from here. Predicting market levels in the short term is quite difficult and futile. These kind of investors are prime candidates for FOMO.
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