Thursday, December 3, 2009

Never a dull day

The Nifty took a day off yesterday, marking time as the bulls were probably tired. But, the trend does not change. For the second consecutive day, the Index closed above 5120. Now, I am not a big fan of numbers. Often, we hear someone say: "If xxx closes above XXXX and remains below YYYY then do this if DDDD is not violated". I always wonder at such statements: what exactly does this mean?

So, the number 5120 is not sacrosant. It is just a convenient level I have identified to focus on. The Nifty was inside a range, and to me, a close above 5120 is required to suggest that a range breakout is taking place. That sems to be happening, as the Index is likely to close above 5120 today, giving us three consecutive close above the resistance.

Our task is not to look at valuations. The NSE website says that the PE for the Nifty is 22.8, hardly low. But, so what? Markets can remain irrational for long periods of time. The trend is up, so go long on dips. Always follow your stops.

1 comment:

gourv said...

Hello Sir,

Gourav here.I guess u can recognize me.I am software engineer in TCS.Day by day it is becoming difficult for me to focus on my job,because what ever free time I am having i am reading Trading books. I have a collection of 700 trading E-books. One of my friends brother is an arbitrager for last 10 years.He told me that he can arrange a trading job but first 3 months I have to just monitor may be they will give me 5000 to 7000.And I am OK with that because may be after 6 months I can get a salary of 12-15K which is 50% of my current salary,but still I will be happy with that.And simultaneously I will trade for my own account.Please suggest me.I know the risk associated in trading,I had huge position on 2008 jan 12 when market hit lower circuit.so please suggest me if I am doing at least 50% correct in my decission.I am waiting for your reply.

Regards
Gourav