Thursday, September 4, 2008

Why we cannot talk up the Market

Markets will go up when the buyers are stronger, more persistent than the sellers. This will happen when the buyers want to buy. Much as we like bull markets, we cannot push up the market simply by talking about it.
Remember, in January 2008, the Nifty was at its highs - 6300+. The market was talking of higher and higher levels, but we know what happened. The Nifty went into a bear market, reaching 3800 in just seven months.
My point is, there is a difference between talking about a market and what the market actually does. If the Market wants to go up or down, its direction will be visible on the charts. If the market has more determined sellers than buyers, it will fall, even if all the speakers on different channels suggest a rally.
What are the charts telling us ? The Nifty continues to be in a range. Last month, we saw the Nifty breaking down to make lower highs. In the past few days, the index has broken through resistance. By doing so, the short term trend has turned up. But, the Index continues to remain in the range.
The Nifty is enclosed in a fairly large trading range between 4200 and 4650. Inside this large range, currently, I see the Nifty inside a smaller range between 4400 and 4500. When the market is inside a trading range, the best trades are the breaks from these ranges, small or large.

3 comments:

Deepak says sudershan is Best said...

Mr Sukhani I need a small help ,If you could please tell the future of cairn in short term by c hecking the charts...

I bought 1000 shares at 243 and now its trading at 229 crucial support level ..I bought that because 3-4 days back all people on channels were saying we are suggesting to buy cairn at 245 and it is a very good stock & suddenly they started saying going short can go up to 200 ...very strange

I know all this is happening of crude falling ......
I can hold it for 1-2 months ...

Today I sold 250 shares at 227.5 ( stop loss triggered ) just to have enough money to average if goes lower and find support and than to sold at little high .........

thanks in advance .........

Anant Gopal Khadilkar said...

Dear Mr. Sudarshanji,

I am your fan and also subscriber of Trend Mechanic and R T Pro. If you allow to express my views on Mr. Deepaks problem. It may be easy to comment after damage is done; however as objective of this blog is "to discusses the use of technical analysis to trade in the stock & futures markets with a focus on the Indian stock market"
I would like to share following points for Mr. Deepak -
1. In my opinion wrong stop loss was set. When support level is at 217~220.
2. On 05.09.08 Cairn has touched RSI 40 line and is at 39.34. In past it hardly had remained below 40 RSI level. On daily chart.
3. Mr. Deepak may just closely monitor Cairn; prepare action plan ready in writing and then buy at suitable level to average it out.

I hope my guru Mr. Sudarshan will concur with my views.

Thanks and Good Night.

Aurobindo said...

This is my view on cairn.

Support zone :- 210 - 220

Resistance 1:- 252
Resistance 2:- 274

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