Monday, September 15, 2008

Bear Hug Again

Wikipedia tells us:
A bear hug is a strong, hearty embrace, as if being hugged by a bear.
While the world is not collapsing, the financial environment is certainly getting worse. Investors are naturally becoming more 'risk averse'. Equity which carries high risk, is no longer the flavor of the season. This period is going to last for some time, till equity investment becomes more attractive than debt (and less risky). Yes, be assured, such a time will also come.

How do bear markets end ? This is a repetition of a theme discussed earlier, but here goes:
Bear markets end when the 'public' gets pessimistic enough to forget about shares. This has not yet happened.

What can happen to the Nifty ?
The Index has broken down from an eight week trading range, setting a target of 3800 - 3850 for itself. IF, and, this is a big 'IF' - the 3800 support breaks, then we have a free fall to whatever number the market likes. There is no support below 3800.

The preservation of capital is much more important than trying to make a few points in the market. Take care.

5 comments:

Sunil said...

I am reading your blog regularly and like your blog and your approach to stock market to be a safe player, like you have written today for preservation of capital which is very important.

Praveen said...

Brilliant sir,saw you in Cochin and have taken inspiration from you.
The last statement you have made is so pertinent.
Thanks for putting things in the right perspective

Kandarp said...

there's got to be some support in between 4000 and 3800. if we are in 3800 range already then should we see 3800 by tomorrow? next week?? the range must have some time attribute about it !! does it Mr Sukhani...pls elaborate

gurdeep said...

Like on n-deal NRG OK last monday nifty closed 70 points of day high this monday(today) nifty was 90 points up from day high.

FII sold shares worth 700 cr & DII buy 1400 cr so we can see + in days ahead and downfall is limited.

Gurdeep Singh
Patiala

karan said...

i follow you for years now. just a note of thanks for all your valuable tips. Regards
Karan Sahoo