Sensex Technical View :
Sensex as expected has tested the 8900 zone by making a low of 8957 closer to the lower range and 61 % correction. This was the most preferred zone of 8900 /9300 being mentioned since we reached 10700 zones. The simple and clear strategy to get in early and get out early with lower risk and higher returns is the best way to go in such volatile markets then to be part of the total move.
Although Sensex has a gap around 8740 which can also get filled but it would be a buy on dips from 9000 to 8700 with a stop of 8500 on closing basis technically. So look for stock specific options or wait for a sustaining move which may try breaking 9900 to give some quick impulse.
Technical Comparisons and Possibilities :
The strategy we have been using is to react then to predict of late . As a matter of fact its simple either markets will go up or go down , but all the technical views in the market -men have been one day up and down the other day with quick conclusions.
The consensus at 10500-10700 was of 12500 and at 9000 it goes towards 7500. So our simpler/watchful strategy and analysis of waiting for confirmations has been more fruitfull , less risky and on the mark.
As we see in the chart above there is a possibility Sensex may form a flag pattern. This has been compared to a similar one before. The major trigger though remains a breakout from the flag and the sloping trendline. So we will continue to track this pattern over next 2 weeks as a back drop to any market move. A fall below 8500 on closing basis would negate this possibility.
Stocks to watchout for :
Reliance Inds sustaining above 1195-1215 could lead a strong bounce back in mkts and may test 1300 + in that case.
IDEA cellular is sustaining nicely in the current fall and a move above 53 would give a tgt of 60 + in short term. 45 is a level on downside which is imp support
MTNL and Nalco seem to be showing some positive bias. Can they give a quick upmove is difficult but possible in good markets.
Market Observations and Thoughts :
ATF prices slashed by 12% . The last price cut of 17 % on November 1st was one of the reasons for a sharp drop in inflation in Nov 2nd week. Will this further cut lead to a moderation of inflation around November last week. Yes it seems so if other components support or stay stagnant.
Over the last few months have been seeing the insider trading n Sast list on bseindia getting bigger only by the day. There has been good creeping acquisitions in many companies. But dunno where i could get an entire archive of the same so we can get more insights.
The major myth or fallacy with a day trader or even a positional trader who is into it as a business :
You can either go/remain long or Either go/remain short on the 200 + sessions over the year.
Why is staying on CASH/ No trades not a position.
I believe the third one is the safest when one is not very confident or the business ( trading / swing ) is difficult to gauge.
As a matter of fact in any business or profession there is a provision for Sick leave , Peak Season / Off season , Paid Leave ,Unpaid leave Vacation. All of us should try to co-relate these things with our Stock investment / trading business which will definitely lead to better productivity ( profits ) and patience ( stability ) in the long run. THINK ON IT !!!!