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