Dear Investor,
Please add following stocks to your watch list
I have not added any positions to the Oct 2009 portfolio yet. The reason is simple, I am not able to find a single one. All the stocks show green at superficial level but when I look at the charts. Its not convincing.
Those who have already missed out on huge rally are extremely impatient now. They are willing to throw in money at the market because it always goes up. It has been for past 6 months. We are on the verge on earnings season. Stocks are pausing and waiting for actual results. They have priced in huge growth already. They will check if the stocks prove them right otherwise they will exit. The trend is still bullish and has lost the momentum for now.
I want to show you something very interesting regarding US Dollar value and NIFTY performance relationship. Past few months US dollar is continuously loosing value and hence putting pressure on International money managers to keep buying emerging market stocks to retain the value of their money.
Following is chart of $USD. Since March of 2009 it has been continuously dropping. This is where FII's are forced to buy other assets to preserve their value of money. At the end of this chart is pressure gauge MACD. MACD tells us if the buying pressure is on or Selling pressure is on. Right now the selling pressure is reducing. What I mean is the rate of sell off in USD is reduced to a such a point that it could give a buy signal. That will be very bad of NIFTY. We will see that in next chart.
Look at the NIFTY chart generated by the same software. Exactly after Mar 2009 the market took off and FII's kept buying. I told many times that FII's are buying like no tomorrow. The reason is very clear from above chart. As long as USD keeps loosing value the markets will keep rising. Recently we have seen rate of rise has reduced. What do you think happened? I guess, the rate of USD fall has reduced and same is reflected in charts below. Please note the MACD pressure guage at the bottom. The buying pressure is reduced on NIFTY.
I am not finding any stocks which would invite money as of now. I just don't want to give any stock and burn with it. I am staying away from the market for this month. Unless I am convinced that its the right time to enter which I will only know from charts. Check current recommendations in OCT 2009. It is not working. Right now, I think we should not trade on the feeling on missing out. Missing out has been one of my prominent feeling which made me put the money down. October is not a good month of investors. It might be just helpful to watch the game unfold. If we miss that will be okay. At least we would know what is the next direction of this market. Until then, lets not fight to make money every single day. Its always good to take vacation for your health and money.
Look at the NIFTY chart generated by the same software. Exactly after Mar 2009 the market took off and FII's kept buying. I told many times that FII's are buying like no tomorrow. The reason is very clear from above chart. As long as USD keeps loosing value the markets will keep rising. Recently we have seen rate of rise has reduced. What do you think happened? I guess, the rate of USD fall has reduced and same is reflected in charts below. Please note the MACD pressure guage at the bottom. The buying pressure is reduced on NIFTY.
Let's put both the charts together. The line with red color is USD and the other black line is NIFTY. Its clear like water that they are in some relation to each other. The dollar falls, NIFTY rises and dollar gains causing NIFTY to fall. If we end up seeing some correction, It could be certainly linked to USD and not the performance of Indian companies. It does not matter, as the dollar rises, FII sell their stock. Thats the rule they learn in their trading schools. They make no exceptions to their rules.
The economic picture of USD is very bad for now. We do not know when it will improve but this is a trading world. We buy because others are buying and we sell becuase others are selling. Thats why fundamental analysis does not prove itself right all the time. Its either buy buy buy or sell sell sell. When the buy buy buy starts on dollar nobody will look at the fundamentals.
I am not finding any stocks which would invite money as of now. I just don't want to give any stock and burn with it. I am staying away from the market for this month. Unless I am convinced that its the right time to enter which I will only know from charts. Check current recommendations in OCT 2009. It is not working. Right now, I think we should not trade on the feeling on missing out. Missing out has been one of my prominent feeling which made me put the money down. October is not a good month of investors. It might be just helpful to watch the game unfold. If we miss that will be okay. At least we would know what is the next direction of this market. Until then, lets not fight to make money every single day. Its always good to take vacation for your health and money.
Live US Dollar and NIFTY comparison
Thanks
Anil
Please forward this email to your friends and family members to help them build wealth under technical stock market guidance.
LIVE NIFTY CHART (Spot the buy point)
LIVE NIFTY CHART (Short Term)
Disclaimer: Please trade with your own judgment or with the help of investment advisor. We are not responsible for any financial losses.
Stop Loss: Sell Stock if it closes below this price. It tells you that market has proved you wrong. Accept it.
Thanks
Anil
Please forward this email to your friends and family members to help them build wealth under technical stock market guidance.
LIVE NIFTY CHART (Spot the buy point)
LIVE NIFTY CHART (Short Term)
Disclaimer: Please trade with your own judgment or with the help of investment advisor. We are not responsible for any financial losses.
Stop Loss: Sell Stock if it closes below this price. It tells you that market has proved you wrong. Accept it.
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