Sector Rotation may give some ideas on when the Market is bottoming out. While there are no surefire rules, experts suggest that Technology will usually be the first sector to bottom out. Thus, tech stocks may start building a base even as the rest of the market is falling.
As the bottom approaches, we may see relative strength appear in banks & financials. While it still may lose value, it moves from a market laggard to a market leader to give us a sign that things are beginning to change.
Readers may have surmised the essence of this note: Financial and technology sectors should be the areas leading the market out of the bear grip. Relative strength + base building in these two sectors should start giving us warnings on the possible end of the bear market.
A bear market rally on the other hand, may see gains accross the board, with sharp, wild up moves. This could give us some idea that the up move is not the beginning of a bull market.
Not as easy as ABC
Identifying the start of the next bull market is not so simple. The best financial wizards of the world have failed miserably in doing so and protecting the money of millions of people. If they can fail so spectacularly, individual investors can be excused for getting some ideas wrong. The point is to try and be a market follower, not try to teach the market.
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► 2011 (200)
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► October (28)
- Answers to comments oct31-11
- Process of Consolidation Likely
- Nifty Pattern Targets Reached
- Happy Diwali
- Stock Selection (based upon their historical volat...
- M&M Consolidation
- Niftnear ORB Trade
- A dip in an ongoing up trend
- TATA Motors Life Cycle
- Hindalco touches support
- Mystery of the missing trailing stop
- Nifty Live Oct 12-11
- Point and Figure Charts
- Aiming for a better trade
- Long term view of Nifty
- Zen stories for Traders
- Hero Motor Corp at its support level
- NR 7 in Nifty Weekly Chart
- trading with a gap open
- Silver Pushes against Resistance
- An unusual continuation pattern in the Nifty
- Sudden Rally
- Nifty at 4750
- There is a time to be old and a time to be bold
- Afternoon review
- Nifty - Long Term View
- Higher High - Higher Low pattern in CNX IT
- Bear market shows its strength
► September (53)
- The Bear Story
- Nifty in a well defined range
- Morning View Sept 29
- Nifty Options Trade
- Nifty on way to close higher for this F&O settleme...
- Learning Ideas
- Short term trend is up
- Something Better
- A tale of two trades
- Before the Open - Sept 26-11
- Reliance - something better
- Nifty - A long term view
- Adding value to your analysis
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▼ November (26)
- Weekend Reading, Nov 30.
- Rally, maybe
- This time it may be different
- Market will tell us when it is bottoming out
- Hard Work is the easiest way to success
- New Posts
- This Bear Market may last longer than we imagine
- Is there a rally ?
- Traders enjoy the process of trading
- Bear Market continues, Nifty, Sensex may go below ...
- Choppy Market with down bias
- What should Investors do now ?
- Nifty returns for a 'Test' of earlier lows
- The trend remains down
- A Matter of Trust
- Udayan in Amritsar
- Early Morning Review - Friday 14 Nov
- It is not about earnings downgrades
- Abrupt End to Uptrend
- Has the Bull Market Started ?
- The 2 PM Review
- So much volatility, Market resembles a Casino
- The Market Corrects its up trend
- Smart Rally, but careful as Nifty comes near resis...
- Quite times coming ?
- Surpirse Rate Cut may not add strength to markets
- ▼ November (26)