OCTOBER 2009, just after the Mahurat Trading day, the markets fell like nine pins.They sought support at the 100 day exponential moving average which was then placed at 15300 odd levels on the Sensex.
Well to speak of there are 50,100 and 200 day exponential moving averages. What makes me stress on the 100 day moving average? As humans we are designed to take cues from the past. History may not always repeat in the markets, but it definitely rhymes! The traders, analysts, brokerage houses are closely watching 16600 and 4940 odd this time.And so am I. The only reason is that in the recent past we have staged a superb comeback from these levels.
Markets have a tendency to tease you when they are around important reversal levels. Hence, you often hear people complaining that they got stopped out at the bottom.
16600 should be taken off on closing basis. But then there also has to be a margin of error! You cannot have a market which cracks till 16200 and you keep hoping that it will close above 16600! So keep the margin at 16500!
With all eyes on the RBI policy on Friday and a holiday tomorrow,it will be very interesting to see how markets behave.
Shipping stocks seem to be a the safe bet as they have nothing to do with the monetary policy.
For stock specific queries feel free to mail at marketswithrahul@gmail.com
Have a great trading day,
Rahul T.
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