Correction Probably Near End

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Dear Investor,

The panic sell off day finally happened this Thursday and Friday. Look at the sell volume in the following charts.Volume is number of shares sold each day. Vertical Green line is a successful positive NIFTY close and Red vertical line is a negative NIFTY close.

Now that we have necessary sell off, now we need to wait for a uptrend confirmation. May be this is a good place some bets but I would like to see some stabilization giving us indication of real end of sell off.

Now lets study previous corrections not in a very distant past. The closest I could find is Feb 2010 and another one in Nov 2009. Both of these ended with a panic sell off day.

Now we need to see two high volume accumulation (positive close) days to confirm the end of correction. It is kind of safe to assume that we will not have more selling without any significant bounce back up. If we continue selling next week then there is certainly a bigger issue that we can not see or analyze. One of the critical issue I see is of US dollar has stopped selling off and Euro Zone has started to supply news story of national debt defaults.

News and Story are two different things. These affect the stock market differently. A news is one of a kind event that comes on and goes away. In that quick moment sell off takes place and we are back to even. Whereas story like Euro Zone Debt issues will supply continuous news at regular intervals so that a persistent fear is developed. Sometimes multiple stories will hit from multiple nations and cause a panic that is difficult to handle and we have throw the stock situation like last Thursday and Friday.

I would like to here your opinion about current situation. write me an email at indiastocktrend@gmail.com about your understanding.

Next blog I will posting stocks that are standing strong in current situation.

Thanks
Anil
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