Tuesday, May 5, 2009

We do not short uptrending markets

For those who still cannot watch the video, here is advice from Mustafa:


"For those who are not able to watch properly, just click on pause button after you start playing the video, and then play the video again after the whole buffering is over. This way the video can be watched uninterrupted."


The main topic: We do not short markets in strong up trend. Therefore, markets must first tell us - "maybe I have gone too far". The three drive pattern gives this message when the third top exceeds the trend line. That line is around 3770 approx. A swing low was marked on the chart with a horizontal line. It is 3350. I would expect a break below 3500 to be a clear sign that the bulls are going away. Till this happens, I prefer to stay on the long side. (If markets keep going up, these lows will change).


While it is psychologically easy to take a contrarian stand, the profits really come from going with the trend. The tend is UP.

How about today - tuesday ? The US markets are roaring, going up, day after day. Traders may like to buy an intra day dip in the Nifty. Here is an example from yesterday.



3 comments:

Tushar said...

Sudershanji, You are doing a great job, adding interactivity to your blog i.e. charts and videos.

I have 2 questions:
(1)I saw a bearish divergence in OBV indicator to price on nifty futures.
Does this suggests distribution?
(2)Was yesterday gap up an exhaustion gap? therefore we are going for a correction if not trend reversal.

men said...

HI,
After looking at the yearly chart on yahoo for the nifty, most of the indicators are showing a +ve divergence, could you please clarify and give your comments if it is a buy on declines, as usual it is a hindsight view only.
Regards,
Sudhin Bathija

income.portfolio said...

Pretty interesting observations. good charts.