Sensex Technical View :
Sensex continues to be in the cautious zone as it has already moved up 50% from lows and closer to 61% of the last fall.
Levels to watch
Gap created at 11635 is a support zone whereas previous tops at 12300-12500 resistances.
Stocks to watchout for :
Many stock charts posted below but would trigger only on crossing of certain levels. GE Shipping and Opto did a small move but Welspun hit stops. The current moves are mainly to the index and many side counters have not given moves even after small breakouts and are hitting stops which are kept very close. Had stop hits in Mundra,welspun and rolta 🙁
For the same reason the view is to reduce volumes and also smaller stops as volatility will continue to be very high !!
Market Observations and Thoughts :
50% GAIN OR 70% LOSS !!!!
Surprise Surprise in the last 2 months markets have given an index move of 50% !!!. Its not very often that such a move has not been welcomed with pleasure by investors as many of them are feeling left out.
The last 50% move in Sensex in the bull market of 2007 from 14k to 21k took almost 4-6 months !!! and this was supposed to be the honeymoon period for investors. There are still not many believers in the current rally but hell does it matter to the market coz it was an opportunity equivalent to 2007 which it gave to all !! Market is supreme opinions are not.
There were two section of people one which expected 6k-7k other who expected 7k-8k ( Me too was here ) in March. Markets were the third SECTION which is always right 🙂
The decision came out to be much different on what the market consensus was but the point is when did you start agreeing with the decision. We turned around our head at 9k-9.5k !.
Those who dint might have had a possible 70% loss as the point of consensus was at 7k but markets are at 12k !!!
There are lot of fund managers who may be on the brink of losing their jobs for being on 20% cash still.Many funds have underperformed the current index move. Even after a 50% rise in the indices the amount of domestic cash in the system lying to be utilized is enormous with huge inflows stilll coming into the insurance industry ( i like Max here for long term ). This gives an indication every 5-10% pullback may see cash pouring with no other reason but to deploy it !!!
This doesnt imply that investors go around buying at 12k-13k!! though many of the people will wake up from the sleep now!Continue to be patient as there are and will be many opportunities in the market provided you are ready to be unbiased and simple.
In the month of MARCH had posted a few strategies and presentations on Averaging and Pyramiding. The reason for it was to create a sense of investment strategy which is profitable and can be again used once index goes into the 11k-9.5k zone.
( many were of the view to selll at 9k to buy at 6k and have been screwed )
Hope the above two presentations helped you if it did then pass it around.
A small column posted in the latest edition of - Money Today magazine.
Readers can pick up a copy from any news stand or check the e-magazine
People interested for a course in DELHI do mail to firstname.lastname@example.org !!!