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Wednesday, February 25, 2009

Trading The Nifty

As I promised this blog is just not going to be about pilitics and economics alone,infact I am gong to write here whatever comes to my mind.(I am sorry if any reader is disappointed by my not sticking to a particular topic ,but then this is the beauty of "The Other Way")

Anyways lets get to the point..Dows breaking again after yesterdays of about 270 points and is running back to 1997 lows as I write this blog.Obama has clearly appointed the markets with not making any concrete announcements.Indecision is worse than decison and markets who better to teach you that the markets.To me if Dow doesnt manage to pull back today,it is nothing more than the tape shouting to short the NIFTY.Indian markets have stood firm till now but when everythings falling it would be difficult for markets to hold the head high.

The evaluations look fantastic at this time,with many companies being undervalued..this might be the right time to enter the markets if you have a longer term prespective atleast 2 years ,but then the job of a speculator is different than that of an investor,who is concerned mainly with ensuring a constant return on his monies while a speculator want to earn quicker profit by following the trends of the market.So far this is concerned ,NIFTY is looking very weak if it breaks the 2600 level.Therfore if NIFTy breaks 2600 we might see the last downside of this bear run...the last exaggeration which is so characterstics of bulls and bear cycles.Yes markets exaggerate,but for a speculator no price is too high to buy and no low too sell
At the same time if NIFTY returns back from these levels and breaks 2800 tomm. I would take it as a confirmation of bottoming out of the market.At the macro economic level,the interest rates seem to be softening and a good agricultural output might be able to stimulate demand but for rest nothing is too positive.Bewre the bottoming out of market does not indicate that the bull run has started.For there would be large consolidation phase when markets would remain range bound and only when macro ecomo,ic fundamentals improve and their is "money" to be diverted in the markets that a bull phase would actually start.Meanwhile either play in range or stay outside..Happy trading

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