Tuesday, September 15, 2009

The Uptrend Continues

The Nifty moved up after remaining for five days in a narrow range. This has been the behavior of the Nifty - a Big Range breakout then consolidate for many days, then take the next move. Back to back gains are not frequent. More common is the pattern of Expansion - contraction for many days, then expansion.

Will the Nifty touch 5150, its pattern target, and, cross it? This question can be answered in terms of probabilities. So far, in this uptrend, all breakouts have exceded their pattern targets. What sectors will lead th charge? My sense is that the current up move has been broad based with banks outperforming. This position is likely to continue.

Will there be a pullback to enable those who were left out, to enter? Well, the markets seldom work according to predictable patterns. If the popular demand is for a pullback, the market may simply keep on going up, till everyone says "there will be no pullback, so let me enter now". This sense has already started coming in. Last Sunday, on a visit to Gurgaon to see some properties (too expensive, not value for money!), I asked the real estate agent: "Will property prices come down if share prices all?". He looked at me and asserted: "Share prices will not fall". Sure.


dr. saurabh said...

dear sir,
thanx for ur this write up.a couple of months back i was reading some book, not exactly remembering which one, in that author was telling the story that one day his gatekeeper gave him a share tip & asked him to buy. he tells that same day he went to his trading desk and started selling the shares slowly.
after few months when he saw in retrospect he was right in selling.
MORAL IS that now we should be more cautious.

plz give ur valuable suggestions.

Viral Rajnikant Dholakia said...

Coming back to Real-estate...

Can't we say that... from what we've experienced till now, the Real-estate Prices tend to fall (or, say, just soften up)with a lag to a (Sharp) fall in Equity prices.

After the ongoing revival in equity markets, whatever demand softening (or for that matter supply overhang) has been Neutralized.

Now, again to have a fall in real-estate prices based on thriving demand-supply equation... like in stock markets, we need 'Double Dip' Phenomenon (in both Equity & Reas-Estate) for a sharp correction or correction to a point where retail investors could get in at reasonable prices.

Not to mention that most of the real-estate companies have satisfied the quench of thirst for 'Liquidity' with the recent spate of series of QIBs. This creation of significant source of liquidity may ensure that the concrete builders do not have to rush in with 'Distress Sale' of their assets (properties), atleast until they feel the quench of thisrt until, may be, another next period of Crisis.

Anyways, the above is only to underline my views on Real-estate, thanks for providing me the platform of your blog to express thesame... Dear Sir.

men said...

Mr. Sudarshan, could you please explain how one should trade on days of gap up/down? What should a person having longs do in case of a gap up?
Secondly what to look out for a trend reversal apart from fiboancci levels.
Thanks anticipating your reply.

Shazia said...

The markets have raced from 8000 odd levels on the sensex to 16600 today covering what it did in 05 to 07 that is 2 years in just 6 months. Is this the correction of last year's correction, implying in a way that there shouldnt have been any at all. What is the level where one will say for sure that the bull maket has returned?

MANISH said...

Hi Sir,
I agree with you that it is time for baking sector to participate in rally. but i am bit surprised as no one is recomending 'DENA BANK ' as it is very attractive . i am surprised as no one is giving attention to lakshmi energy, nutek as these shares are very good and available at very attractive price
and how one should move in this uptrend of market.