Technical view by Nooresh

HDFC Bank , HDFC Ltd and Nifty — Why not to sell new lows in a consolidating market.

Over the last many weeks majority of the analysts, traders, investors have been in a belief if 4700 goes we will go to 4000-4200 and one should short and forget.

A similar view point was at 5200 we go to 4500 but in the next few months we did 4700 and also 5400.


So what do we get out of it is simple --- Its not a strong bear Market but a slow downtrend and the best way to play this is sell on any major rise and buy on major dips. Such swings will be more profitable else one may just keep getting trapped over and over again.


I had discussed about this trap many traders being stuck into in a detailed article – Read it here


Now as we look recently we saw HDFC Bank and HDFC Ltd hit new lows but bounced back sharply to take the stops. The only trade we got was a 2-3% gain on intra day but somebody who tried looking for a deeper correction got stopped out.

Similarly the noise of 4700 gone then 4200 led to many people go short – Nifty did 4640 and back to 4850 + hitting stoplosses. ( the approach of selling below 4700 would have worked in the day for a quick trader but not everyone )


Look at the charts below and see how the false moves happened.










Also currently the next few months would be a good time to build a long term portfolio as well as a bit of churning to reduce costs.

If you would like to build a portfolio or get guidance on long term investing then do look into ourDelivery Gains Product which consists of a model portfolio for long term as well as updates on Indices and short term trades.

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Also will be featuring on CNBC Bulls eye and ET now in coming weeks for the readers info :)


Happy Investing,


Nooresh Merani


Analyse India Market Solutions Private Limited

Article by Nooresh Merani

Nooresh has written 2531 articles.

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{ 4 comments… add one }
  • saurabh shankar November 30, 2011, 14:28

    Hi Nooresh,

    Thanks for the wonderful insight. In such markets what would you define as a good rise 5% or 10% when we can sell a stock.

    Also, your views on ICICI bank. Looked at charts and using your concepts seems that unlike HDFC it is in downtrend.

    • nooresh December 1, 2011, 21:19

      Hi Saurabh,

      One cannot generalize in % falls. But currently 10-12% is the index swings.

      ICICI Bank is in a downtrend for quite long now may bottom out around 600-650 in worst case it seems.

  • Gandhe srinvas November 30, 2011, 22:56

    Sir Have you made any thing skumar stuck @52 possible to get back the money or book losses???????????? LAst time you you willrevert nut not recieved

    • nooresh December 1, 2011, 21:18

      Hi gandhe,

      The stock is good fundawise but it has lot of pledging issues. Also the stock tends to move erratically. If you took it as an investment call then be ready for patience and averaging.

      If its a trading bet then book losses and take a lesson.


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