Technical view by Nooresh

Continue to trade… Investors need to wait with the cash…

Sensex Technical View :
The slow drift down continues in the index. With a sustained move below the triangle lines giving a confirmation of the breakdown on downside . Technically targets would be placed at 8300/7700 and lower. Short term support is placed around 8300-8500 where a pause should come ideally in the current downtrend.
Check the video posted for Sensex Triangles.

Traders should continue to look for stock specific shorts as the downmoves are as of now more in the out of index stocks.

Stocks to watchout for :

Many large banks like SBI , AXIS , Kotak have come close to oct lows and can give a minor pullback move. Whereas PSU banks like BOI , BOB and PNB which were holding up well till now are seeing selling pressure.

AXIS Bank has come close to october low zone of 360-375 and could see a bounce from that range. Buy as closer to the range with a stop below 358 for a small 5-8 % pop. Even Kotak near

BHEL if sustains below 1300-1320 could head towards 1260/1210 in short term.

CESC below 220 can be a short trade for a tgt 210-195 stop of 229. Its a low traded stock so wait for an increase in volumes to go ahead.

Larsen and Toubro has closed below 660 and would be best avoided by investors as targets could be lower. With a lot of news flow volatility would increase too.


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Market Observations and Thoughts :

There is one thing in last so many months that lot many investors and traders have forgotten.
Many a times this could be the best position when times are uncertain ( even if your short implies risking a potential cash loss.)

Every now and then the discussions on the posts since Jan have been to Generate cash , Wait with the cash, Staggered buying to book on pullbacks etc etc. But in all my interactions with investors,traders the frequent question is i have good amount of cash what should i buy or average ?Rarely do i get a question what should i sell or exit?.

The general tendency in markets is to deploy more cash at lower levels then to remove cash and re-enter on lower levels. Do we need to tweak the thought process to better our gains ?

In simple terms equity investment and trading implies to generate a return which is considerably more then what Cash or Money could generate from other sources of investment. It simply means CASH is the default ,neutral or diplomatic position.

How many times in the last so many months did an investor/trader felt being in a neutral position or a street-watcher. If yes then did we get into a partially/fully neutral position or not?
This question would be the best one an investor can ask in their asset allocations.

If you are not in the market all you can lose is an opportunity.

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Best Regards,

Article by Nooresh Merani

Nooresh has written 2531 articles.

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