Tuesday, May 4, 2010

Nifty falls below 5200, looks towards 5000 support

This is what we wrote to our clients today, in the daily letter:


Indian markets fell sharply, closing below 5200, in fact well below this support level, at 5148. The bearish head and shoulder which we have been tracking has been confirmed by today's price action. The pattern target for this move is 5000, although I suspect that the Market may actually fall lower.

We may well be entering a deep correction.

For Investors:

Buying opportunities are likely to emerge whenever the correction gets over. Please remember that a one or two day rally will not be a sign of an end to such a correction. patiemce is the best friend of the Investor. This column had advised liquidation of all shares held on your trading account when the Nifty fell below 5270 two weeks ago. For your investments, we suggest that you switch from low cost small caps to blue chips. There is no hurry. We will provide you with a list of stocks where such switching can take place.

For Traders:

Look for opportunities mainly on the short side. Again, buying on dips is possible in selected stocks which show relative strength. We will provide readers with our own list, soon enough.



Apoorva said...

Dear Sir,

I regular view your blog and had gained immense knowledge form your writing. It had help me lot to solve my query on technical analysis, trading style and money management.

But now I am facing one typical problem in my trading life, I think this obstacle / problem would have come in every trader life, which I am currently facing.

In spite of good confirmation I am not able to initiate trade, this is happening due to fear of going wrong, secondly sometime general market view / talks / sentiments are opposite to my confirmation and it affect my steps in trading. Most of the time I don’t initiate my trade, in short I get affected by general market view, talk, unasked advice, and so many other things and finally I don’t take any position.

I understand even though we might be using common indicator our view can differ. But my problem is not with indictors but with not having enough guts to go alone on my confirmations.

Please guide me, how one can over come this problem in trading / investment career?


sunny said...

Hello Sir,
Today there was a huge correction but I didn't imagined there will be such a fast recovery in the last hour, hence, I missed out the buying opportunity. I want to invest for 2-3 years. Should I invest now or any more correction is expected in the market.
For Balrampur chini stock, I have decided to adopt SIP type approach, I bought some at 72 today, will buy some more tomorrow. Is there some problems with my approach? Please advice.

Sunny Talreja

sam advisors said...

its getting tough for me to decide the prediocity on which i should be working.
because i a if u trade more then u loss more and if u trade less but consistantly u will gain. and will b saved from whiapsaws..
i dont like to put more oders.
with this belive what should be the preodicity i should adopt other than daily.

rocky said...

Hi Apoorva,

I Know this can be best answered by sudarshan sir,
but here is what i can say, coz me too had been in this situation
and im sure all who have overcome this "fear" still continue to feel
it sometimes atleast when the market is overtly volatile. I guess your are
talking about day trades here, you have a view then u must go with with but
limit the quantity if the market u feel is volatile. Its all about talking your
own call isnt it??

and if u feel the volatility isnt going to b much then u can intitiate large

so start trading atleast small volume ,this way 1.You will over come your fear
2.you also know wheather you were right or wrong, if unfortunately u were wrong,
u wont be making huge losses either and ofcourse valuable expiriance gained.

I have heard sudarshan sir say so many times, "some day trades occur the next day"
This so true when the markets are stable, i.e., volatility is low.

Am also waiting for sirs comment on this.


ashok aggarwal said...

Dear sir,
i am one of a fan of yours.i regularly watch your program at CNBC(awaaz) flied on every wednesday at 8:40 a.m.
i also works on your auspicious tips.
i just want to make a regular contact with yours,if possible.
kindly tell me the way to do the same and oblige me.

men said...

Mr. Sudarshan, as the 200 dma is quite close, how do we trade from here? Please tell us how to reduce the whipsaw around this level.

ANAS said...

Respected Sir, its me Anas again (with my old query of ADX] I am working on my Mechanical Trading System (still in its nursery stage] I seek your experience & knowledge to improve it. Sir , it will do me a great benifit , if you would spend some of your precious time to explain ADX. not the calculation method, but its interpretation at differant levels, how it shows whether a trend is strong or weak. the method to calculate the appropriate time frame for differant stocks/indexes. Also, if there is another indicator which determines trend better than ADX. Your views will be highly appreciated. Thank You once again for keeping in touch with us. (the weather in Kolkata is pleasant , with showers in the evening for last 4 days. ]anas_batla10@rediffmail.com

NPT said...

Dear Mr. sukhani sir

You are great in technical world, i believe in you

I Niren P. Timbadia, ( nirenptimbadia@gmail.com ), also predict market trend in 15 day to 1 month advance, according to me the nifty has taken support & it is ready to bounce back till 17th or 18th May 2010, the after it will take brith

on money 10th may 2010, market is looking good accept 1st 40 to 50 minutes

from 11th to 14th may 2010, market will remain flat in the morning & pickup in the afternoon

from 11th to 14th may 2010 we may se one of this day market may go tumble

Hope so market will behave this way only

Thankin you

Niren p. Timbadia, 9969420599

sahil said...

I hate those ppl who write like this, frm 1 jan to 4 jan mkt would move like this, then 6 jan on afternoon will do this, then on feb would do that. Wtf, even if sum1 could predict wats gona happen tomorow so precisely he/she will b richer than ambanis. N then there r such ignorant ppl, bullshit