Amila, these conditions are true in bear markets. When the true bull market starts fundamentals will start to move. Then these fluctuation will decrease and it will be one direction for a while. Also when present fundamental move based on their valuation these drops won;t be like this. What happened last year is market was trading on Pe of 20 and most shares ran to PE of 20-25 even bluechips. So most were due for correction . Now some over-corrected with present earning valuations. Some trade in Pe of 3-6. Also speculative sky rocketed to unsustained levels. Even now we see blue chip fall is not as much as speculative . Look what happend to HVA, EAST , GREG. sometimes 80-90% off the top.
Anyway, if you are a long term player and do not worry about volatility then patience is the key. One day the investors holding right counter will get rewarded as much as 50-100% I think. When I cannot say still.
If short term is a worry then market and price can fluctuate. News is still not good , and there is still no real bullish sentiment., Still market can go down due to even small bad news. Sri Lankan market is so small that it reacts too fast to good or bad news.
With March quarter results coming in 1 month , there is no real reason for market to fall below 5000 saying it needs further correction. Many shares are trading below PE and some between 3-10 with closer to NAv even. The other overvalued ones still can get individually corrected without overall market down.
But the reality is , it can go down as humans create the ups and downs. If people panic and worry about short term then bear will rule again. Sentiments counts a lot not only values and figures.
The ideal situation I expect is for the market stabilize between asi 5000-5500 for while. But wishing is one thing . Reality still is volatility. So being watch full and carefull is the best.
Some short term player will say sell everything as we can buy back cheaper. Some others will say bear is over expect bull and hold one. Both parties have truth but it depedns on one goal. But what I say is we need to seperate and identify our long term, short term , medium term shares and handle them according to their merit.
Did any one think LFIL which was trading at Rs 110 can suddently run to Rs 150. When ASPI was only 10% up. That the beauty of holding the right fundamental. Yes it can go down again but I know it will recover very fast in a bull market.