Tuesday, November 17, 2009

The Great PSU share sale

As per TV coverage, NTPC and SAIL share sale is likely to exceed Rs 30,000 crores this year. That is about US $6.5 billion. This is a lot of liquidity moving out from the market into the hands of the Govt.

Less money could mean higher interest rates, which could mean lower share prices. It is possible that India may see (a) Decent GDP growth at 6%+ (b) Growth in corporate earnings, and, (c) A trading range for stocks. China has gone through this process a few years ago when the Chinese market was falling while the economy was booming.

Indian markets, as we are reminded, are - fairly valued. As per the NSE web site, the PE ratio on Nov 16, 2009 was 22.48. This is not low.

While the markets can do anything, it is possible that Indian stocks may go through a period of relative underperformance as compared to world markets.

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CeTA - Certified Technical Analyst

This certification offered by The Association of Technical Analysts, India should be essential qualification for every aspiring analyst. If you are an exisitng professional then the certification will provide an added assurance that you know the subject. If you are aspiring to become a Technician then the certification is essential to your prospects.

Please visit www.taindia.org for more details. The Exam for Level - 1 will be held in the last week of December 2009.

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Bollinger Bands

The traditional approach to Bands on prices is to identify the bands as support and resistance lines. Traders will often use the lower line as support and upper line as resistance. But, system testing suggests that the opposite is superior in terms of profitability. When prices break the resistance line, they signify strength, thus giving a buy signal. When prices break the support line, they signify weakness, thus giving a sell signal. The bands then become a trend indicator. Like all trend following mechanisms, this approach will lose money when markets go sideways.

10 comments:

gourv said...

Hello Sir,
So if we are of the view that India is going to underperfom in coming years...should we tarde other markets like DOW,HANSANG,FTSE etc...what are the advantages and challenges for tarding other markets specialy the FOREX.

Regards
Gourav

Sanjeev said...

What are the basic principle/assumptions which determines sidewise market ?

kk said...

RESPECTED SIR,

IS UNITECH MAKING HEAD AND SHOULDER REVERSAL? THE VOLUMES ALSO HAVE BEEN MOVING DOWNWARDS.

Nirav said...

Dear Sir,

Can you tell me that what is the difference between Elliott Wave and Normal Wave Count which you normally prefered?

Harsh Munjal said...

J kumar infra is hitting the upper band of bollinger band and its bollinger band is expanding after a period of contraction advise

men said...

Mr. Sudarshan, why no updates? Kindly post your views, we need some guidance.

Viral Rajnikant Dholakia said...

Dear Sir,

Just like learning 'Trading' is a slow and a never ending process, from ur posts i realize that even teaching trading is a slow and a never ending process.

I have been to your site after a long time, say after a short vacation. And what i find as i come back?

You've also started writing little about 'Fundamentals' (be it whatever topic) and not just technicals. Very little fundamentals mixed with lots of technicals... that keeps the menu spicy.

Keep going, the topics of discussion from your end are getting more intriguing and interesting.

mbansalicy said...

we really very fond of you.we cut losses after your guidance & cut my over trading habit.what effect fundamentally on bajaj hindustan after current drama of sap.

Icarus said...

Nifty has been stuck below 5200 for three months in a row now.What are the chances of moving up Vs moving down?

men said...

Mr. Sudarshan, could you please post your trading system if possible for Friday, as the market was very volatile. Could you please help in setting up a mechanical trading system in these volatile days. Thanking you,