1. Always be able to predic the nature of the rally in process i.e. one should be able to identify that whether the rally is a broad-based one or sector centric. A point here to consider is that sector specific rallies cannot lead to a bull runs.

2. Make it a point to study the rally and find if it is a broader pattern of the rally and one will be able to come to a conclusion that bulls are back to business.

3. Sector specific rallies always fizzle out and a point to not is that one should be on the look out for the times when the key stock index crossess 50 DMA (Day moving Average)and 200 DMA.

4. Always keep trak of Volatility index also called as Fear Index or one can say the same for CBOE volatility index. One will be able to get to know the prevalent volatility in the market. Moreover one is able to anticipate the fluctuation over a period of coming 30 days for the index.

5. We will understand the volatility index in light of India where National Stock Exchange (NSE) volatility index(VIX) is trading in the low 40s which means that equity market can witness a uptrend or downtrend to the extent of 40% over the next month.

6. Point here to note is that a high VIX indicates that investor fear has increased and in case it is a sideways market or a stable market, VIX is generally trading below 10. As a safe strategy for investment one can buy when the volatility index dips below 20.