Sensex has hit a new high but a whole lot of midcaps have corrected today with a 5-10% drop in many of the stocks. This is always part of the business- small caps may double in quick time and also ddrop by 20-30% or more similarly and thats why i always say be highly selective and check how much risk u can take. Also sensex did nuthin in the last 2 -3 mths but midd n small ccaps did so correction ...
Sensex Technical View :
As had been stated yesterday that sensex could see resistance at 21100 and next at 21500 an same levels to continue. Sensex made a nw top at 21077 close to resistance zone and still remains a good shape but the composition of the stocks which are contributing to the rally is not exciting as select heavies running. So be selectivee in index picks also .
TECHNICAL ANALYSIS SESSION ( batch zie less then 10 )
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Market Strategy :Some lines that can help in strategizing ur trading n investments.
1) Mid caps and small caps have started correcting after running a lot in the last 2 months and the portfolios of all investors should have given unexpected returns.
2) So its time to take a review and exit all the stocks which u r not convinced of fundas, risky tips, pennies and reduce somee in over run stocks and plz dont see the high it has reached and wait for similar levels to reduce. See overall run and current price.
2) A whole lot of stocks with very low weightage or some stocks with very very high weightage is difficult to manage so get a lil defensive remove some weeds and trim the money giving tree leaves to take some money home.
If u have a portfolio dont see the buying price of a stock or the amount of loss in the stock or the gains in the stock . Coz u will end up cutting good profit stocks and carrying losses. Just see whether ur whole investment portfolio say 1 lac how much is profits 20k -50k -80k 1.5 lacs. The profit amount is what u buy a stock and not to support the stock or its promoters.
Above all as i always say dont stay overleveraged or ddo margin trading at higher levels. I am also not in favour of averaging losses and believe on the other side where in to add thhe stock at every new move. Best thing to do now is increase cash component as part of discipline.
As i say be mechanical and rational as this is serious business and real money.
Some of the trading calls initiated have hit stops and its better to exit thee stocks then drag on to them. Opportunities are always there in the market and dragging losers has much more time loss attached.
Stocks to watchout for :
Reliance inds , SBI could be the leaders in any mkt rally ahead so can hold on to ur old investments in them.
Risky bets which can take a run ... Polaris , OK play and select IT stocks can bounce back frm lows.
Best Regards ,