Nifty for 22 May 07

These are my personal musings. These are not in any way meant to be trading advise. To view the full chart, right click and open in a new window.

We have finally arrived at our D-Day of the cycle in time of 22 May 2007. From today’s trading it seems to have turned out like a non-event.

Quite a few friends have either written to me or asked me on chat what they should do. Exit all longs? Go Short? Buy on Dips? To all such queries, I have a very simple answer. Please get out of the habit of trying to pick tops and bottoms. Treat trading like any other business, rather than like a casino.

A cycle in time is just that … a cycle in time. Allow the market to tell us what the price is doing. Tomorrow, either of three things can happen.

The market can continue up.

In that case, it is suggested to just keep tightening stops on the bought position.

The market can move sideways.

In that case, the stops are always there to allow the traders a profitable exit.

The market can move down.

In that case, the stops are always there to allow a profitable exit.

The common thing among all the three scenarios is the stop. And that is what will keep our profit intact.

The Nifty is making historic highs, and bulls are worried? I find that very strange.

From today’s move, it does not seem that the bull run is over, not as yet. We may have a short term top today. But then, I repeat, allow the market to tell us that, rather than jump the gun.

Even though the price is banging away at the historic supply line, why are we worried, when the supply line is rising? A rising line means added profit. It is that simple.

Plan your trades and trade happy.