Nifty for 19 Mar 08

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.

Bulls, hold your breath. The previous bottom is still holding.

The indices are attempting to make a short term bullish pattern. But have still not been able to. As is the norm nowadays, the Index opened with a gap, and then traded as it wished.

The sentiment is still not positive. We may see a bounce back up tomorrow, but it may be viewed with scepticism.

Tomorrow is the weekend.

Another reason why this move may be viewed with scepticism is that the Nifty Future seemed more bullish than the Nifty Index. All said and done, the Nifty Future is a derived trading product based on the Nifty Index.

It is my guess that the market may run stops near the derivatives expiry next week, and that could be a decisive bottom.

Therefore, it makes no sense to suggest trading levels for tomorrow either.

Trade happy after planning your trade.

Nifty for 17 Mar 08

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.

As was mentioned a few days back, we see there is a divergence between the BSE and the NSE Indices. The Sensex has already violated the previous panic swing bottom, whereas the Nifty is still holding out.

This brings us to the ultimate question. Which is more reliable? The Sensex or the Nifty! This simple question cannot be answered in a simple sentence. However, I will try.

The Sensex has more followers because of its age. However, the Nifty is more accurate because of its trading. The Nifty Future is traded reflecting the NSE Index, and therefore, I would place more reliability on the Nifty rather than the Sensex.

In any case, whether the Sensex or the Nifty, the sentiment is really fractured, as of now. On both the indices, we do not see any meaningful move, which can allow us to conclude that the short term trend is changing to up.

If the short term trend does not change to up, so will the intermediate trend also remain flat.

Therefore, for bulls, I can only suggest patience. I am still of the opinion that the market could swing from here. I may be wrong, as I have been wrong several times earlier. The market is so oversold, that something has to break. We could see a move up. And this anticipated move may be viewed by the so-called extinct bears of the Indian Stock Market as an opportunity to return. How strong will the bulls be? That remains to be seen.

But I know only one thing about the market, and that is a true age old adage. It takes a lot of money to push the market up because it needs real money to buy, whereas the market can collapse on its own weight because it does not need money to sell. Buy when there is “blood on the streets”.

Trade happy after planning your trade.