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.The charts alongside are of the crashes in the Indian market and how the Nifty future reacted to it. The first chart is of May 2004.
The second is of January 2007.
The similarities cannot be ruled out. The May 2004 chart shows how long the market had to wait, till the negative sentiment was negated. On the other hand, we see the same thing happening in a very short time in Jan 2007.
It is assumed that the "doubtful" region shown in my earlier post, would be broken on the upside. Of course, corrections cannot be ruled out. However, if the 5400 level is indeed broken with good volumes and stays above it, we could be looking at heady bullish days.
That does not mean we neglect our stops. Stop losses have preserved capital and locked in profits for us on hundreds of occasions. Give the market the respect it deserves.
Trade happy.
1 comment:
Sir
i am a small fry in this cut throat market.
i have drawn a fib retracement from aug 07 to jan 08 and today market(nifty) just closed on 50% line and the weekly pic is very blick with momentum indicators and my own macd which means more downside,
your invaluable opinions solicited.
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