Trade only when right

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This time budget did not bring the 10% market bounce as it did last time. After the 10% bounce at last budget of 2009, market basically just keep rolling in a range bound trend. I am not convinced that huge rally is about to open out. All the stocks I track are getting sold. There is no real buying pressure to see. Small change is prices last Friday, appear deceiving to me. As if, somebody is just waiting to sell out all this position to me.

Technical indicators are extremely oversold and some kind of bounce is very likely. I am very afraid of sugar sector stocks. They are just breaking down very hard. May be a good choice to short when they bounce back on this rally.

To make money, you need not trade every day. You must have your strategy to enter and exit the positions. Today's market is very confused. The greed and fear are going hand in hand. Many people took positions, possibly on margin to sell there positions as soon as the budget rally happens. Unfortunately market is not that predictable. It does not do what you wish it to do. That is why, you should be following the market and not expect it to do what you wish.

Look at the following stock chart of Cholamandalam DBS. This stock sold off very hard and then rallied back to 70s. Now its basing in 60-70 range. This 60-70 range trading is called consolidation. This is phase where professionals take there positions and retail traders sell off their holding. Once the 70 is broken then will stock will keep growing. This is one of the strategies you could trade. Trade only when its right to trade.



Look at Hunung Toys and Tex, It has the similar pattern. It got sold off hard then bounced and now it is consolidating. The challenge in these positions it to wait until it breaks out of this consolidation range. Why wait and not buy right now? The reason is we will not know how long will it keep consolidating.



So look for stocks which are consolidating in a range and wait for the breakout. Trade only when right.


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.

Hard to pick stocks in this environment

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I could not find really good stock for investing right now. The technical damage suffered by most the stocks is too much. None of them are inviting for short term traders. Most of these have to consolidate in a tight range before they bounce back big. Certainly this is not the time to invest most of your money. Even a short bounce in stock is sold off quickly. Be safe than be a looser.

Please add following stocks to your watchlist

Orchid Chemicals is only one going up in this market



Following are break-down stocks

Thanks
Anil
Got a Question/Send your contributions for other members: 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.

Man made disasters and man made solutions

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Euro zone Greek troubles are getting deeper as people are in panic mode. I believe these are man made disasters and can be solved by man. The paper money financial system will have its peaks and valleys over the period of time. The system was established to have more convenience and we can't be perfect at the system. It will take time for man to realize the problems and then he will fix it. Human race is growing intelligence. We build on our knowledge and move forward. Problems bring opportunities to us to fix our behavior so we could build better future.

So, the money issues in Euro zone will certainly damage the EURO in near term but it will teach important lesson to us and others. That will eventually build more sustainable financial system. Panic is certainly not the option to go with.

As far as Greek bailout, it will most probably be provided to them. We should consider two possibilities. In case they do not get the bailout money then all the stock markets will correct even more. The simple reason of this is the Dollar strength will bite into asset valuations. This is the remote possibility. In next couple of weeks, the news of Greek support would be released and then we will see sudden drop in dollar strength and gold and Euro is likely to raise.

It also means the the stock market could also raise in coming days. The best thing market did last week was just to hold on to its current level. That is a signal to us that a short term bottom is in place. This is the time when most people exit out and wait on sideline. Since the sellers are now not the part of the game, buyers will raise the quotes and demand premium from others. As sellers watch this quotes go up, they will get impatient and start buying at higher prices than what they sold out at. This will create another round of panic buying similar to panic selling what we saw earlier this month. This will create opportuties to exit on your positions and I am pretty sure that we will have another leg down after which these sellers will not be part of the bigger rally that will eventually unfold.

Please add following stocks to your watchlist

Adani Enterprises
Ajanta Pharma
Bajaj Auto
Bank of Baroda
Financial Techno
Geometric
J K Tyre
Network 18 Media
orbit corporation

some interesting news for you http://www.reuters.com/article/idUSTRE61D0ZC20100214

Thanks
Anil
Got a Question/Send your contributions for other members: 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.

Bottom in Sight

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I believe we are very close to the short term bottom. The panic sell what we discussed before has been seen in this market. Friday almost 90% volume was on sell side. Such a extreme sell volume is sign of panic sell off.

The call for bottom might be little bit early but hey, sometimes we have to make a call and move on. Keep enough bandwidth for averaging down later in case we are proven wrong. You might have to cut your losses too. But the point is the risk today is much less than the risk at NIFTY 5300 levels. Chances are that there will be a bounce and it might fail but we don't know that yet. What we know is panic sell has taken place in India and also in US markets. In fact the panic sell level has been seen in all the countries.

The story they used to get the sell off done is Euro zone debt defaults. Think about it, the story has been floated for few days. Don't you think the top brass new about is already. Now the story has been successfully implanted in individual investors mind that world is going to end and you must sell your positions. The emotional traders takes this story and becomes a hypnotized puppet that simply will react to the situation and start selling. The task will be accomplished for market makers and they will suck up all the best in the lot. You, the story carrier will be left alone to reflect on your reaction after you are out of the game.

Well, I am not telling you to go and put all your money in the market. What you need to think about the power of media. It changes your personality and forces you to take actions at wrong time, like buying at the top and selling at the bottom.


Please add following stocks to your watchlist

In last correction NIFTY took support at 4600 level. We are very close to that. So even if there is no possibility of big rally, we should anticipate at least a bounce near 5000-5200 level.



PNB is a very strong stock in this correction. It has just closed near its support level. We should book profits around 900-950 level.



Ranbaxy is on steeper sell. It has just touched 150 line which should act as a support. Might be a good start.



SBI has broken 150 day line. I think that was done to trigger selloff at massive volumes. It could bottom soon and claim its 150 day line as value buyers step in.




Torrent Pharma is making new highs in correcting market. Keep watching it.

Thanks
Anil
Got a Question/Send your contributions for other members: 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.