Getting Closer to bounce

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Dear Investor,

We are closer to the end of correction than anybody else might think. The reason why I think so is following chart. We have just touched 150 day line last week. We are also at bottom of support box. Its the bottom of the blue range box. We have two heavy volume buying days. These events point to end of correction. But I want to show another chart.

US Dollar is strengthening. They reported very good GDP. Euro zone troubles are not easing for now. All this will add further strength to US Dollar. The USD has just crossed above 150 day line and it is still holding it. This time it is not crossing back quickly below 150 day line. This is very dollar positive and gold negative. FII will definitely sale there positions if this continues to rise. I believe they already have started selling. These are the smart money owners of the market. They are always ahead of the crowd. They sell their positions when everybody is willing to catch the bottom and step out. Of Course they will provide support when the valuations become cheap and hold your sold positions to sell it back to you when you are ultra excited to double your money. Any ways, Dollars strength is not good for NIFTY in near term.

Here is the most interesting chart of this week. Comparison on USD performance to NIFTY performance. Red line is USD. Black line is NIFTY. If you look carefully as the dollar continued its slide NIFTY continued to ride higher. Now Dollar is rising and NIFTY is falling. If our range bound market thesis is right then we are very close to the end of correction. But you need to watch the Dollar. It will invalidate everything else on other charts

Following stocks are at the bottom of the range

Thanks
Anil
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Strong Stocks in this correction

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Dear Investor,


Market correction is still on. The ultimate sell off is not yet here. I advise some patience to the members before doubling down on your position. Following NIFTY chart is clearly marching towards the support of 4900. I see most of the stocks in NIFTY and MID cap space are breaking down. The only sector holding well is Auto.

There is a big difference between current correction and corrections before. The optimism before and now is different. Before investors were all bullish and were expecting spectacular earnings growth. Well to a large extent we are in growth path but the growth is certainly supported by government liquidity supply. The supply is expected to tighten. Just now I heard that US is going to put a spending freeze.

Even though I am bullish on the market, I do not like to buy until 4775 is hit on NIFTY. We are likely to see some bounce before the correction continues. Please give at least 4-6 weeks before investing any more money. I am not talking about daily 1-5% stock fluctuation. We do not participate in day trading which is very risky and 99% people loose money in that. It better to just watch now.

Following stocks are standing very well in this correction. Its not a call to buy these since we are in correction. Keep them on your shopping list when time is more inviting.

Surprisingly Infotech enterprise is moving higher in such a market conditions. Somebody knows something that others do not know about this one. well, Lets watch it for some more time.

Perfect Breakdown Stock

Indiabulls real estate stock formed a perfect breakdown pattern. Its highly unlikely that this stock will be able to survive the correction. There are two possibilities about it, One it is getting ready to bounce hard or it will just crash from here. Next few days will be key to see if it holds its support line.

Another strong standing bullish stock - Havells

Rule no 1 - Do not buy stocks below 150 day moving average line. Remember it all the time.

Thanks
Anil
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Game Plan for Panic Sell

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Dear Investor,


They found the reason to get the selling started. In India, its either buy buy buy or Sell Sell Sell. Just a rumor could get people so excited to act on their immediate emotional urge. Stock Market moves on emotions of people. Most people get kicked out of their positions just because they do not have any game plan.

Today, I want you to think about your game plan for this panic sell off. Following is a bull market run of market from 2004 to 2008. I have red support line that is usually the support line. Markets do not break these lines. Next line is 400 day long term support line. Its impossible to break this line in bull market. In fact the day market touches 400 day line, that's the best day to enter into market.

When markets break 400 day line and stay below is for more than 4-6 weeks. You have entered in long term bear market. Well, lets not talk about bear market since we are noway close to it. We are in full fledged bull market and need to trade with bullish bias.

Look at the chart of last few months. We have 100 day, 150 day and 400 day lines representing the support. With current force of selling, I believe we will break 100 day line. The challenge for us will be to enter at 150 day line touch or to wait for 400 day line touch down.

It is very likely that most of people will run of the shelter now. They will start dumping there positions and go to cash. Many people get sucked in the last few weeks of top. The market maker likes to have everybody on board and then the colors change. Market corrections and bull runs are part of investors life. They should not be cause of anxiety and neither it should make you happy, overconfident bull.

Markets will correct no matter what the situation is. Markets correct to rise again letter. I have learned my lessons, you need to learn yours. Send me your story if you would like to share with others.

Do not panic with the current sell off. I have repeated many times that you should be in cash position at least 50% or more. I waited for long time for the correction, well it finally has arrived. It will bring better opportunities for all of us. You could average down around 400 day support line or take new positions.

Have your game plan. Do not succumb to emotional and market pressures.

Thanks
Anil
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Few Signs you must watch this earnings season

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Today was the first day where investors really worried about the strength of dollar. They should be worried. I have explained in past the relationship of dollar strength and market corrections. Last week, I was so impatient with the way market behaved. It wasn't making any sense.

Look at the following chart of US dollar. The position it has acquired right now is very scary. Scary in the sense that it is on the verge of breaking out. Breakout essentially means that everybody has to buy the dollar. It will strength with just a thought wave. It will send shock waves in market directions. Well, I am kind of sure that market will only correct and not crash. The cause of crash is missing.

Technically Dollar has resistance 78.75 So hopefully it will reverse from here. But a break above this level will let it raise freely. That does mean the correction in all commodities and stocks has to occur. This is required to adjust the value of assets in dollar terms. Asset rise in price if dollar weakens and Asset price reduces if dollar strengthens. The reason I am pointing this to you, is to make you aware of what happened suddenly that is influencing the market.

Make sure the stocks you have stay above 150 day moving average line. That should be your fear point. If stock closes below 150 day line then it is bad sign and needs caution from you. Currently I believe the stocks will correct until 150 day line and hold that support.

Thanks
Anil
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Wait for Market Crash - Part II

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Once again with a positive trend proving itself, it is becoming important to change our thinking about Market Crash Wish List. The most important thing we need to learn is about learning the patterns formed over a period of time. Instead of investing because of fear of missing out or just plain greed, we need to see the true pattern being exhibited.

150 day Red line in following NIFTY chart is the most important support line. In due course of time Market will touch this line. Right now the its at 4745. That 500 points correction. Well, it is possible that the market sells off and goes to the support line. The other possibility I see, is that market just keeps trading in 5000+-200 points and bring the support line up.

There is a possibility after the earnings season is complete, market will just float around for quite sometime. The great crash needs a great cause to make it happen. Right now that cause is missing, only the hope for it is alive. Any ways, I made my point that you start looking out better positioned stock than just wondering around.

Even if crash like sell off occurs, it will be your chance to get in at better rate.

Please add following stocks to your watchlist

Thanks
Anil
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Stop Loss: Sell Stock if it closes below this price. It tells you that market has proved you wrong. Accept it.

Wait for Market Crash - Part I

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Oh...I am tired of waiting for the crash in this market to happen. Irrespective of news, the market just holds on or just going up. I wonder, What will take to get everybody selling. Nothing I guess. The buyer base is so wide and so large, any selling just gets sucked up. Nothing left to sell at lower rates.

Whatever everybody else is touting, I do not believe that this market will crash. There is not indication for that. One thing I am sure is that few stocks are getting ready to break out and make new highs. Dollar strength, gold weakness, bad earnings news...nothing matters..the buyer is excited and is willing to buy. I have been waiting on cash for quite some time. I believe the time to change the strategy has arrived. We should start building the positions in phases. With a medium term view of 3 to 9 months, buy your selected stock now and keep the half position to be filled for next correction. If the market falls so what. It will fall to rise again.

I know, Stock Market is a emotional game than a game of numbers. Right now there is a balance of fear and greed so market keeps in the range. It will be a good strategy to just accumulate. At no time we should be invested more than 50%. Keep the rest for either huge breakout or tiny correction. This market has huge support base at 4700. It will not be violated under any circumstances. Be selective and be in the game. Only 50% though.

Kansai Nerolac has been sold for quite some time. It might have put in short term bottom. Its ultimate support is at around 830. Good buying interest has been seen at 1000 level.

Gujrat Mineral is on my watchlist for quite sometime. Recently it has just broken out to upside and small correction it had was quickly wiped out. Good volume accumulation days observed so might be worth your money.

Century Enka has wonderful chart pattern. Buyers are all excited about it. Very sharp uptrend. Good buyer support in this range bound market. Buy some now and buy some if it corrects and hold it.

Adhunik Metaliks just started to move up. Classical bullish pattern. Keep it on your watchlist. If it closes above 125 for three-four days then it will raise well.

ACC overall cement sector is doing very very well. Keep at least one cement stock in your portfolio. Ambuja Cement, Dalmia Cement or may be Grasim.

The wait for Market Crash is too much. Its not happening and it most probably will not happen soon. We have seen the worst already. Earning season will be used to generate some fear or worries to get you out. My suggestion is to stay strong. Keep your stocks and average them down in correction.

Sell your stock only if closes consistently below is 150 day moving average line. If you need to learn about how to plot the chart, please check my previous blog entries.

Thanks
Anil

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Stop Loss: Sell Stock if it closes below this price. It tells you that market has proved you wrong. Accept it.

Essel Propack - Worth the price

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Essel Propack has great chart pattern. It is rising faster and we might be at the junction of trend change. I still added 100 shares to my portfolio with a plan to add more if it corrects to 45.

Mahindra Ugine will go higher with shakes and breaks. If you can take the shocks touch it otherwise leave it. Look at ABB and Siemens, these guys have started moving out of base.

PFC has been questioned by many in past. It looks like it just found its upside pressure and will move higher. Give it couple of days to prove itself.

Thanks
Anil
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Stop Loss: Sell Stock if it closes below this price. It tells you that market has proved you wrong. Accept it.

Range is the name of the game

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Dear Investor,

Its difficult to find compelling investing opportunities. The upside trend is intact but the pressure to move it higher is lacking. We will have to wait until some significant development takes place. Many of the upside breakouts are just failing to move forward. The stocks are returning back to there mean value.

Year 2010 is less likely to be straight up or straight down. It will consolidates by going down a bit and then rising a bit. Our skill will be to pick at the bottom and sell at the top. That seams to be the best bet to make money in this market. Right now the market breakout is getting shaky. After the market moved higher it is getting sold no matter what the news is.

Well, certainly not a good time to be fully invested. Cash position should be built for upcoming opportunity that will soon arrive. May be another 3-4 weeks we would be able to take our positions.

Thanks
Anil
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Please forward this email to your friends and family members to help them build wealth under technical stock market guidance.

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.

Shipping Sector Excited

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Dear Investor,

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Thanks
Anil
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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.

NIFTY Testing its Breakout

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NIFTY has been range bound for quite some now. Well, this is not a new news for all of us. We know the market is flat. Recently it has made its attempt to make a new high and now its trying to maintain that gain.

The fact remains that this market can break out in either direction. It could just try running higher or could start correcting taking support of earning news. The market makers need something to keep going. But one thing I am pretty sure is that this all is going you make us lot rich or richer eventually. If this market corrects 30% or more that should be most welcome situation for all of us.

But the caution is not to keep just waiting for that kind of correction. Reason is simple. If the market starts breaking upside then everybody will be caught off guard and just watching. If the markets breaks out it will rally lot higher than we can even imagine. It has built almost 6 months strong base in the range of 4700 to 5200. This base will be the foundation of new rally. So keep alert and be ready with your watch list.

Market just made new high. That's something, isn't it?

Please add following stocks to your watch list

Crew Bos is starting a major new uptrend. The ride will be shaky. Do not sell at any point. Accumulation is your best friend in this stock.

Easun Reyrolle is starting a new major uptrend. Keep accumulating slowly. Panic buying has just taken place so wait for few days and start putting you orders. May be 10 shares at a time with a target of 100 shares. Do it in 5-10 trades.

GSFC - excellent chart pattern. It is just now at its higher end of price. Accumulate as you get lower prices.

Gujarat Mineral - Very strong uptrend. Panic buying is taking place. Will cool down sometime then you could start building your positions.

Recently I learned on more thing about market is that it goes through Panic Buying and Panic Selling stage. After these days the trend usually changes from up to down or from down to up. It is risky to buy when panic buying is going on. Panic buying is when everybody is jumping in with the assumptions that they will miss out these shares. Similarly panic selling is when everybody is selling with the assumptions that the stock is worthless. Both these conditions market end of the trend.

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


Please forward this email to your friends and family members to help them build wealth under technical stock market guidance.

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.