| Pillars of trading..... |
| Wednesday, February 24, 2010 |
| End of the day… I "see" the market through the lens of four primary metrics: fundamentals, technical, structural and psychology. When viewed in isolation, each of those approaches has inherent flaws. Fundamentals are best at the top and worst near a low. Technical indicators often trigger buy signals higher, on breakouts, and sell signals lower, after a stock has broken down. Structural factors —debt derivative and currency effects can self-sustain in a cumulative manner until such time they overwhelm the system. Psychology, such social mood and risk appetites, can gain momentum until they snap under the weight of the herd mentality. Even before seeing rail budget I am inclined to write in favour of Bulls on metrics no 1. Metric 2 and 4 could take market down to 4500 also post budget as most of the market participants are victim of these metrics. In the entire history of Indian Budget the only FM which dared to present the Budget on off market day was Mr V P Singh and there is no other exception. He had presented the budget on Saturday when markets were closed. This Budget which is being proponed has another first to its credit. This will be the only Budget which will be followed by 3 consecutive holidays depriving the Hon'ble FM to read the market reaction. The budgets are generally presented on market day because each and every F M is interested to note how markets reactions to his proposals read in the parliament. This is the reason Mr Mukharjee chose to present the budget on 26th instead on 28th. Now we have holiday on 27th 28th and 1st march in row and the real curtain raiser happens only after the market closes on budget day because the hard copy is generally is not available before 5 to 6 pm. I get my hard copy from the North bloc at 6 pm on the budget day. The final analysis happens only after going through the hard copy in detail as the speech of the Hon'ble FM cannot include everything. Market has consolidated over last 2 week after going to 4650 once and since then it has been under accumulation between 4800 and 4900. We have seen seeing selling above 4900 and buying around 4830 to 4870 levels from good FII and market participants. Chances are really to be taken only in such markets where there are more sellers for want of clarity and few buyers. The odds are in favour of Bulls though the possibility of one sharp spike is not ruled out to create fresh positions on the first day of the fresh settlement. This could be followed by 3 day holiday and then market may re open only o Tuesday to re act in fair manner. Though there is NIL participation from retail and HNI and market completely hinges on FII act right now the GOVT is in favour of market rally as there is no gap for the next FPO coming on 10th March 2010. Those who want to take risk of going long may take with caution of holding the positions even if market corrects. A strict stop loss of 4720 and 4650 can be used for exit and trade reversal if you become bearish for any reason. Those who are short or want to go fresh short should keep 4 960 as immediate stop loss. Market will show merciless move above 4960 without giving any chance of short covering. You must be true to yourself. Strong enough to be true to yourself. Brave enough to be strong enough to be true to yourself. Wise enough to be brave enough, to be strong enough to shape yourself from what you actually are |
BigGains !!
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