Monday, November 3, 2008

Quite times coming ?

The Fifteen Minute Rule (referred to in my previous post) is now described here .

The Nifty opened with a big gap, then stayed in a range, finally closing above 3000. The Index has gained over 800 points from the intra day low made at 2252 last monday. That is a gain of 35% in five trading days. If we take the close on Monday at 2550, the gain is 500 points, still at good 20%.
It seems fair to expect the market to slow down. The short term trend is up. We should remain buyers on dips. The first sign of trouble for the bulls will come if the Nifty were to close below 2900 - that will suggest a gap has been closed.

In any case, after a strong rally, all over the world, we should expect a period of quite with a sharp fall in volatility. This may be a good time to sell options (professional traders only).

I wrote a brief article for Money Today (from the India Today group) published in their Nov 13 issue.

5 comments:

tushar said...

Sudershanji thanks for the 15 min rule.

Sir, I had a query.
Actually my friend is entering the market but he has account of 20k only.
So how much should he leverage i.e. use the limit for intraday.
I wanted to know how does money- managment apply here?

Mind Without Fear said...

Dear Sir,

I found the following article

How Disciplined Traders Measure Risks

(http://biz.yahoo.com/tm/081031/18300.html?.v=1)

which also stresses risk management through position sizing and stop loss. It is nicely written, and I wanted to bring it to your attention.

Regards.

Vinod said...

Some Definations to ligthen the mood of the readers....

New Investment Definitions

These terms have been redefined to fit current circumstances:

CEO - Chief Embezzlement Officer.

CFO - Corporate Fraud Officer.

BULL MARKET - A random market movement causing an investor to mistake himself for a financial genius.

BEAR MARKET - A six to eighteen month period when the kids get no allowance, the wife gets no jewelry, and the husband gets no sex!

VALUE INVESTING - The art of buying low and selling lower.

P/E RATIO - The percentage of investors wetting their pants as the market keeps crashing.

BROKER - What my broker has made me.

(S&P) STANDARD & POOR - Your life in a nutshell.

STOCK ANALYST - Idiot who just downgraded your stock.

STOCK SPLIT -- When your ex-wife and her lawyer split your assets equally between themselves.

MARKET CORRECTION - The day after you buy stocks.

CASH FLOW - The movement your money makes as it disappears down the Toilet.

INSTITUTIONAL INVESTOR - Past year investor who's now locked up in a Nuthouse.

MOMENTUM INVESTING - The fine art of buying high and selling low.

'BUY, BUY' - A flight attendant making market recommendations as you step off the plane.

FINANCIAL PLANNER - A guy who actually remembers his wallet when he runs to the 7-Eleven for toilet paper and cigarettes.

CALL OPTION - Something people used to do with a telephone in ancient times before e-mail.

YA HOO - What you yell after selling all you owned to some poor sucker for $240 per share.

WINDOWS - What you jump out of when you're the sucker that bought Yahoo for $240 per share.

Jatin Soni said...

Do u think its just another pull back ( the much awaited one ). If yes, then how much it generally retraces in a bear markets ?? as u pointed out it has already retraced 35%

Anand said...

wht prospective for long time market, any range plz suggest