Bubble Trouble

The best way to spot a bubble is when everyone and his uncle start trading investment tips and predicting the next sensex or nifty level. We faced such times during late 2007-early 2008 duration. It seems everyone was on the bandwagon and was busy discussing Reliance Power IPO.

I present a chart below which shows that Indian markets are still far away from attracting volumes and interests they generated during 2007 bubble phase.

When indices makes new highs on the back of lower volumes, it is generally due to more institutional investment in high value stocks. Maybe that's why CNX Midcap is still far away from its record highs.

Time will only tell whether this rally has more legs.