Monday, September 8, 2008

Never Fight the Market

This is a pre-market post (7:54 AM) on Monday. I received many comments on the Saturday post where I suggested that the Nifty could touch 4650 now, and, 5200 maybe. Some comments have been published.
The underlying theme in most comments is: : "This is a suckers rally". "The Nifty will face resistance ". There is even a suggestion to go short at higher levels.
In my humble opinion, this is the wrong approach to trading.
Never fight the trend. An individual trader may not be in tune with the current momentum. Often, the best traders devlop mental blocks. This is always possible. But, going against the momentum or trend is almost like financial suicide.
What is the evidence ? The Nifty is likely to see a big rally today. Probably touch 4600 easily. This is not just the Nuclear Deal, today morning, the USA has nationalised two of its housing finance companies. This news is giving a 4% rally all over Asia.
But, the reasons for the rally are not important. The evidence is that the market will rally. We should let the market eventually decide what it wants to do. Meanwhile, either we go with the flow (which is Up) or stay away. Going short is not a good idea at all.

3 comments:

krishnamurthy said...

thank u sir for ur comments ... appreicate it

Deepak says sudershan is Best said...

Dear Mr Sukhani ,

I just dont understand one thing as You always mentioned go with the trend and if something is going to happen charts will suggest,

Then why so many analyist come on tv & start saying like target of 5000 or 3800 in an uptrend & downtrend respectively ....

They never talk about breaking support & resistence & never consider about any changes in macros which can take place inbetween!!

Its quite frustrating because because of this only so many investor loose there money as they buy on very high rates in an uptrend which eventually causes them huge loss & second sometimes there downside target of 3800 or 4000 make them close there positions on huge losses which eventually could turn into profits ........

I think channels like CNBC ,NDTV,Zee should be more responsible & should maintain
good quality.they Should make Elite pannel of advisor who can only give suggestions !!not just everybody who can come & fill there time slot as few good advisors are busy quite alot.....

I haver seen people start giving advice on the basis of just day or two days gain or fall & mostly influenced by emotions ......

what do you think on this?

VJ said...

Sudarshan,

I agree 100% with you. For stock reader, trend is his best friend. Emotions and opinions have zero value.