Wednesday, February 11, 2009

Back to Square One ?

The American Markets fell on Tuesday evening, almost 4.5% or more. This suggests an impact on Asian markets today, including India.
We have seen a slow and steady rally from the lows at 2625 finally reaching 2950 yesterday. After any rally, a dip or correction is possible. A decline today should be assumed to be a correction of the ongoing up move. Support comes in at 2835 (Near month futures) where the Nify had made a minor resistance line earlier. So far this line holds, I assume that any decline is a correction. A break below 2835 will be a sign to exit long positions, but will still not be a short selling signal.
What can go wrong ? Well, the Market can continue to slide, breaking these levels, one by one.
Have Fun!


gurvi said...

Taking cue here and your appearance in CNBC i'm not going to short anything....If 1000B$ can not bring cheers to Wall street then i'm not sure what else they are expecting...They follow 'Buy on Rumors Sell on Fact'.
Do we follow the same? What you say Sudarshan ji.

gurvi said...

Interesting note on Tuesday Sell Off:-
"Buy on News Sell on Fact"

On Tuesday, the Dow Jones Industrial Average (DJI) slumped more than 380 points, or nearly 5%, marking the blue-chip average's worst drop in more than two months.

The sell-off came after Treasury Secretary Timothy Geithner unveiled the latest attempt by the government to rescue banks and the financial system.

"The response from Wall Street to...Geithner's non-plan plan was a resounding 'No,'" said Dan Greenhaus, market strategist at Miller Tabak, in a note.

Many analysts and media reports explained the market reaction as disappointment that the plan was short on details, specifically, on how the government would deal with the toxic assets that have plagued banks' balance sheets and the financial system for more than a year and a half.

But not all agreed with that assessment.

"Nonsense," said market veteran Barry Ritholtz, CEO and director of equity research at Fusion IQ.

"If you look at the run-up in the market prior to the announcement, for three days there was already a big boom in all these [financial] stocks," he said. " The second [Geithner] started to speak, the market just fell apart, a classic 'sell-the-news' type of reaction."

News That you can use