After the bull's reign, there appears to be no end to the ongoing bear party on Dalal Street [Get Quote]. The BSE Sensex on Wednesday slipped below the Black Monday low of 9,826.91. The Sensex was down 200 points on Wednesday.

What is really baffling market analysts is the kind of impact global factors are having on the Indian markets. Domestically nothing has changed since May 10, when the Sensex was ruling at 12,612. The corporate numbers continue to be good. The GDP numbers are also quite stellar.

But no one is willing to buy this fundamental story. There is a lack of confidence in the market and the buying is not coming in even at the lower levels.

Market analyst Rajesh Jain thinks that the market needs sustained buying to get out of the current rut. "There is no fresh commitment coming in. People are taking up opportunistic positions. So there is little commitment left in the market. At this point, the problem with the market is the lack of commitment and sustained fund inflows. Sustained buying is what is required to take the market out of this level," Jain says.

Analysts are advising people to stay with known names in this market. Technical analyst Deepak Mohani thinks that for those people who have got a nice blue chip portfolio for several years, there is no reason to dump that.

"There is no reason for people with a long-term portfolio, and with the blue chip that they have had from 5 or 6 years to get out. They can absorb this decline and get in into the next bull market," he says.

As per Mohani, the trouble is more for those people who have got into the market in the last one or two months. He advises them to "book their losses even though they may be substantial enough."

Jaideep Goswami of HDFC [Get Quote] Securities, on the other hand asks people to bide their time and postpone their buying.

"There is a possibility that we would get better levels. So there is no compelling reason to go and buy because stocks have corrected now. The broader undertone will continue to remain bearish," he says.

"We need to see the overwhelming sense of optimism, which is not yet back. People are basically looking for profits even now. We may see some buying coming at lower levels in stocks like Larsen & Toubro or Ashok Leyland [Get Quote] or Maruti Udyog [Get Quote] for that matter," he adds.

Clearly, there is a sense of caution and even analysts are not sure which way the markets would swing now and what kind of strategy would be effective in these troubled times. This dilemma is best summed up by T S Harihar of Karvy Stock Broking.

"The only strategy that I can think of is a volatile strategy, where one just takes a bet that the markets will be volatile. The only thing that I can bet on is volatility. One can make combination buy calls and puts. Other than that, it is very difficult to take a directional strategy on this market," Harihar concludes.

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