Global Weakness Continues

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Dear Investor,

Global Weakness will be the focus of coming week. US market has officially closed below 150 day line that is bear market sign. The news flow has also turned negative. Good news is it has not had any impact on India market. There are two possibilities in US market. One is market is preparing for a reverse head and shoulder to launch a great new rally. Second is it will correct significantly to form a new bottom.

NIFTY Stock Market is in overbought condition. I would like to wait for sometime before taking new positions. Lets inspect the emotional aspect of this market. Every body's mind is echoing "This market is not going down. It just goes up no matter what. Every body's money is growing and I am not able to participate in the rally." This kind of emotional battle goes on traders mind. This in my experience is the time when to stay back. you do not want to do trade because your mind is emotionally forcing you to take the position. You do not want to trade with the fear of missing out.

NIFTY

Observe volume bars in above chart which are showing more red lines and less green lines towards the end of chart. This in usually a technical condition called distribution, where volume increased on down days and volume decreases on up days. Especially with global weakness spurring up, little caution is advised while excitement is at most high.

Please add following stocks to your watch list

BF Utilities

Development Credit Bank

Arvind Mills

Thanks
Anil
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