Wednesday, September 2, 2009

Is this a breakdown?

A small trading range between 4650 and 4710 may have finally broken down yesterday after one big false move. While the Nifty closed at 4625, well below the 4650 support, today's premarket suggests that the decline is likely to continue.
While targets for the downside are difficult to estimate, suppport based on earlier price bars, comes initially at 4570. We should not get attached to one single number, rather think of this support as a zone. The next area of support is 4500 to 4480.

But, how do you trade? The day trader should take both sides of the trend, up and down. The short term trend is down, therefore, it is possible to go short.
The Position trader should not buy the dips until and unless markets finally find a low and stabilise.
If you have existing long positions, then, follow the stop losses strictly.

3 comments:

men said...

Kind attention Mr. Sudarshan,
Your posts on the site are coming with a time lag, and many would not view them before market opens sometimes. Hence request you to keep this in mind.
Regards,

Shazia said...

Sir,
The markets are behaving quite dramatically these past few days, it sure seems like it is headed for a big move but wants to keep us guessing. Yesterday the nifty futures closed at a discount and today it has closed at a premium suggesting maybe that the markets would open on a positive note tomorrow. Awaiting your comments.

thanks
Shazia

djpraks said...

i read yr blog regularly but have not made money in last 2months. till june 1st week it was good.i just want to know why always we r told to exit after a big downside may be 200 points & r told to buy after rise of 200 points