With the market zooming up one day and plunging the next, analysts think it's best to wait and watch in this volatile situation.

"Individual investors should continuously book profits to stay liquid, and buy on the basis of attractive valuations and not hype," said Jigar Shah of KR Choksi Securities.

The Sensex tanked by 542 points on Friday, but finished flat on Monday. On Tuesday the market brushed aside a CRR hike to recover by 290 points. Wednesday's whopping 615-points fall that pulled all Sensex stocks into the red has, however, left investors wondering what they should do.

"The market has displayed tremendous volatility in the last five days. Investors should wait till the market cools down, even if they have to buy at prices that may be 15 per cent higher after things it cool off," said Anil Advani, head of research at SBI Capital Securities.

Analysts also advocate a stock-specific strategy and that investors keep an eye on global markets on which a lot would depend. They are advising investors particularly against overexposure in real estate and construction that have been attractive, but are now deeply in the red.

"One should adopt absolute caution and stay on the sidelines till things clear up," said Ashu Madan, national head, retail equity, Religare Enterprises Ltd.