When to start counting 150 day line?

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Dear Investor,

Mike asked me a question yesterday
"I take a stock today and want to know its staring point for 150 days movement. From which point or month do I start?"

Please check following chart of MARUTI one of the early leaders in this rally. That starting point to really find the 150 day beginning is around FEB 2009. The problem is we will not be able to find the starting point just like that.

MARUTI

The best way it to start by drawing 2 year chart. 2 Year history from today. You will clearly find a break point from which the stock starts to move higher. If the stocks price is below 150 day line then its in bear market.

When to short a stock?

Look at the ICICI BANK chart. Its break point was in May 2009 to go long in the stock.

Lets see if it would be appropriate to short it today. The stock is above 150 day line so its in long term uptrend. Will it come down in next few days. who know. it might. But Is that a true short point. I guess not because it could bounce back hard. Then when was the true time to short this stock.

Look for Feb 2008 time frame. This is the time when ICICI back closed below its 150 day line. It started true fall from there and did not stop until Mar 2009.

The stock rallied many times withing this time frame but never cross the short point of 1100. Check the following chart with ICICI bank with 50 day line

Look the rally up to 50 day line and going down, it rallies back down and goes down again. This whip-saw action kills lot of traders.

Check DLF chart and send me your answer about when was the correct time to short this. And if you could tell me what to do today?

Thanks
Anil
Got a Question? mailto:indiastocktrend@gmail.com


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