Saturday, May 30, 2009

The lighter side of trading

I returned from the CNBC Investor Camp at Agra, late evening. I sat down to write this blog, then paused as I felt I should first reply to some comments, and, maybe write my ideas in another post.
Men says :
"......... some guidance on how do we go about it has been left UNANSWERED from your end, while questions asked in lighter sense has got a prompt reply why? HOPE YOU WILL NOT DELETE THIS POST"

My Notes: I do not delete any comments. Perhaps one or two comments which contained unaccceptable language were deleted since I started blogging.
It is quite possible that questions asked 'in a lighter sense' have received a prompt reply from my side. I suppose these questions are easier and more fun to reply so the mind quickly focuses on them.

Men's question is:
What you are saying in other words is buy low and sell high, sounds so easy, but EQUALLY hard to implement.Say we touch 4600 and then a dip comes to 4300 would you say buy into that? Would that be better off or buying now and taking the risk of seeing it come to 4080 and then rebounding from there, that is what makes us look at people like you. Please give us levels to work with, on cnbc you said "3500 IS NOT IMPOSSIBLE and SO IS 4500 some days back the market can do what it wants to" So please give us levels for entry on dips and exit on rallies, rather than wait for a dip.

My Notes:
Here are segments of my blog posts strating from march when the rally started. I have tried to share my views on the market with readers.

Monday March 16, 2009
The Nifty has moved above its 20 period MA today. If the index were to rally towards the upper bollinger band, that gives a target of 2900 for the Nifty. A failure to touch the upper band will be a signal that the bear market is alive and kicking.
The next resistance for the Nifty is 2800. Traders may wish to step aside and let the market decide if it wants to move above this resistance area. if it does, then buying is suggested.

Thursday March 19, 2009
A significant resistance level continues to hold, pushing prices down whenever it is challenged. This may be happening in the Nifty where the 2800 resistance seems to be strong.
If the market feels there should be no dip, it will start another up move above 2825. Monday,

March 23 Morning
While the American markets fell on Friday. Monday morning is a different story. Asia is up, while the SGX Nifty suggests a strong rally is coming in the Nifty.
A decisive close above 2800 will suggest a breakout from a trading range, leading to 3000 or even 3100. Short term traders should not fight the trend.
Is the bear market over ? This knowledge comes much after the event. I assume this is a rally in a bear market.

Monday, March 23 evening
A 5 percent gain in the Nifty has set the markets on fire today. These gains have come together with up moves in world markets, all over.Is this a bear market rally or the beginning of a bull market ? The answer is not relevant to traders who should follow the trend. The trend remains up, so go with it.

Thursday March 26
The Market continues to go up. We go with the flow, which is UP.

Friday March 27
Investors must remember that this bull move started three weeks ago. The Nifty has gained 20%+ since then. Surely, the market can gain more, maybe 30% or even more. But, investors must understand that the risk reward ratio no longer favors them. If you invest now, you may earn money, and, then again, you may not.
For traders, the decision is easy. Buy on dips. When these buying positions begin to lose money, the bear rally may be coming to a pause.

Wednesday April 1, 2009
The Nifty is now in a trading range between 2980 and 3100. This range has lasted for five days. A breakout above 3100 could see 3220 or higher

Friday April 3. 2009
Bull Markets do NOT start with a big bang. Therefore, the curent rally may well be the beginning of a new bull market, but as of now, this is not confirmed.

Sunday April 5, 2009
It seems fair to expect the markets to maintain their strength. A breakout above 3150 tells us that the Nifty may be on the move to touch 3700 to 3800 in the next few months.

Wednesday April 8, 2009
The short term and intermediate trend is up. Today's likely dip may change the short term trend to down if Nifty futures close below 3227, Monday's low.
Should this be a buy on dips opportunity ? Yes. But, you need to wait till you get a setup on your charts that says - "the dip may be over".

Thursday April 9, 2009
The trend is UP, world markets are rallying as I write this. Traders should stay with the trend

Saturday April 11, 2009
The Market says, I am going up. This message is coming clearly in the charts.

Thursday April 23, 2009
A small trading range between 3350 and 3500 was broken yesterday when the Index closed below 3350. A decline is expected. The key question here is: Is this a correction in an ongoing up trend, or the beginning of a new leg of the bear market ? A 'normal' pullback can take the Nifty down to 3150 support without changing the intermediate up trend. Therefore, at some point, when charts begin to give 'buy on dips' signals, we will take them.

Friday, April 24, 2009

Markets at another inflection point

A close above 3500 will justify a long position (buying) for traders a well as investors. For traders, the task is simpler. Buy with stop losses.

Friday May 15. 2009

Today's trading view is positive.
Should you carry long positions into Saturday's big news events? My views has been: avoid trading during news events. I always stay away. You may wish to keep an options straddle by buying calls and puts of 3600 strike. That's to take advantage of any sharp post election.

8 comments:

Ashish said...

Sir,

Please take a course in Delhi. All kinds of 'experts' are coming from Mumbai and taking a whopping fee from people who want to learn. Please sir!
Ashish

CHANDU said...

Sudarshan ji,

Iam not that great to suggest u anything,but u no need to give any reply to the MEN's comments.He just want everything freely in a command way.

The way ur supporting us,we know about u very well.roadside dogs will bark.we no need to care about them.I hope you had great trip in Agra.

For MEN---learn how to be obidient from sudarshn ji,he just wrote a post for u,what a lucky fellow u are.just apolozize publicly.

Hatsoff to u sudarshan ji.
take care.

Gurvinder said...

Hi to All readers of this blog,

Please do not have any doubts on Mr Sukhani's comment, either on TV & here when he writes.

He's pretty much consistent on all media forums.
I'm very grateful for the fact he take extra pain on not only writing & maintaining his blog but answering all our questions. We can't pay his debt but atleast click on various advertisement on his blog so that he can enjoy atleast a dinner with his family in per week :)

lol !!
gurvi

piyush sharda said...

HAS THE NEW BULL MARKET STARTED?

sudarshanji, nifty made a bottom of 2542 on 27/10/08 and 2573 on 19/3/09.

it satisfies all criteria for double bottom. (within 3% range, separated by few months, and the market has risen substantially above the intermedaite peak)

Double bottoms are very powerful reversal indicator of primary trends.

50 day ema crossing 200 day ema is another bullish omen.

when we are not in a bear market it is either bull or bull in waiting. what do you feel? I am your dayv subscriber and also made money in election with A1 system options whice was long. my only concern why i cant increase volume in this is that the options that we hold lose very substantially near expiry. How to trade it?

piyush_sharda@rediffmail.com

Bhupesh said...

Could you please throw some technical light on Suzlon. Do you think a good correction is awaiting in Suzlon as per http://tradingstocksontechnicals.blogspot.com or Still the trend will go up. What do you say sir. I always take you technicals very seriously.

Thanks

Mind Without Fear said...

On the more serious side of trading, I lost money ( close to 60 Nifty points ) on May 29 and 29 when everyone else, I presume, was making money!

The essential reason for this debacle is that I tied to call tops in a rising market and got burned.

I wrote about it in my post
http://stockmarket-methods-in-madness.blogspot.com.

Perhaps, others can benefit from my experience .....

love said...

thanku sir i am a new admirer of yours. i just want to say:-



WE REALLY LOVE YOU SIR!!!


THANKS

men said...

I have never doubted the abilities of Mr Sudarshan at any point of time. My q was at 4600 we will again feel wait for a dip, at 4800 again we will fell wait for a dip, and we just keep waiting and waiting. MR. SUDARSHAN HAS CLEARLY SAID THE MARKET HAS A MIND OF ITS OWN, he said 3500-5000 both are possible, and we are near 5k.
MY POSTS WERE IN NO WAY CHALLENGING HIS ANALYSIS, it was just that I wanted levels for the dips he was referring to.
So for the others will they now buy at 4200 as 4500 has been taken off? or wait for 5k and again wait for 4800 to come again? JUST GIMME A DIP LEVEL TO ENTER THAT IS ALL.
Mr. Sudarshan if you don't like my questions I will not ask any more thanks for the chance to post my views here, but I WILL END " IF U GIVE A MAN A FISH YOU FEED HIM FOR ONE DAY AND IF U TEACH HIM TO FISH U FEED HIM FOR A LIFE TIME".
Thanks once again.