I recieved a fair amount of comments on my analysis and comments on Idea Cellular. So here is a reiteration of what I said:
On Monday afternoon, as Bharti Airtel showed a lot of weakness, I was asked on CNBC about the stock. I said "This is a correction. It is a buy on dips. So is idea".
I explained this concept in this blog, yesterday. If the trend is up, then a correction is a buying opportunity. Today, telecom stocks opened much lower, with Idea almost 10% down. This qualified as a dip. I went long in Idea futures at 64.60 with a stop that was below the day's low at 60.xx . This is my initial stop.
Now there are any number of ways to analyze and trade the market. With some planning, most of these ways are fine.
Nifty's current behavior (volatility) is similar to the pattern saw in 2007 when the Nifty was moving above 5000. This seems to be a sign that smart money has probably started selling, while the 'hot' money continues to buy. There are many possibilities: smart money may become a buyer if it sees the market going up, or, 'hot money' may become a seller, or the tussle may continue till one of these two gets exhausted. We will watch with interest.