Nifty is up 9% this month and market seems to be showing no signs of exhaustion. Every day: it’s the same story: it makes small progress [minor gap-up] and refuses to correct. The market has been so strong that it has not even offered running correction this month.
Destination seems to be 200 dma.
It looks a Reversal to Mean rally
Source: www.chartalert.com
Nifty has been facing stiff resistance at 200 dma since May 2011. Three attempts to cross over 200 dma has failed since then. This looks like another attempt and considering that how market has rallied till now: it’s quite likely that Nifty may rally to 200 dma in next few days or a week. Anyways, it’s just 160 points from current levels
The Market is Overbought: Myth
Statistically, the market seems overbought. But one should ask a simple question – What does this kind of move would have done to the psyche of individuals who have been waiting for correction for days now? Overbought state has no significance unless it is accompanied by euphoria.
When people are unhappy with rally, you don’t call it overbought.
Today is Credit Policy
Today is Credit policy and one can expect some volatility today. One of the biggest criticism of the current rally has been that it has not even offered running corrections i.e. intra-day correction. For last couple of days: Nifty is stalling around 5055-5060 and hence it would be interesting to watch what Nifty does today post Credit policy..
CHALTE CHALTE
The market moves wherever it wants to go. It does not care about you or me. It does not play favorites. It does not discriminate. It does not intentionally harm any one individual. The market is always right.
Lots of times we miss the market move because we’re focused on what the market should be doing, rather than on what it is doing
Fundamentals fall by the wayside when emotion drives the market. That’s why the market can stay overbought or oversold for an extended period of time.
Remember, Markets don’t go to moon. They will stop…but for gravity to kick in…euphoria needs to build up.
Euphoria never builds up in prices but in state of mind of market participants. Once it builds up – it reflects in complacency [writing naked puts, buying unlimited calls, going overboard on building trading positions].
Complacency is a required condition to puncture euphoria. [No matter how smart you are, every human being is vulnerable to mass hysteria.]
Please let me know your views. Do give your feedback.
Destination seems to be 200 dma.
It looks a Reversal to Mean rally
Source: www.chartalert.com
Nifty has been facing stiff resistance at 200 dma since May 2011. Three attempts to cross over 200 dma has failed since then. This looks like another attempt and considering that how market has rallied till now: it’s quite likely that Nifty may rally to 200 dma in next few days or a week. Anyways, it’s just 160 points from current levels
The Market is Overbought: Myth
Statistically, the market seems overbought. But one should ask a simple question – What does this kind of move would have done to the psyche of individuals who have been waiting for correction for days now? Overbought state has no significance unless it is accompanied by euphoria.
When people are unhappy with rally, you don’t call it overbought.
Today is Credit Policy
Today is Credit policy and one can expect some volatility today. One of the biggest criticism of the current rally has been that it has not even offered running corrections i.e. intra-day correction. For last couple of days: Nifty is stalling around 5055-5060 and hence it would be interesting to watch what Nifty does today post Credit policy..
CHALTE CHALTE
The market moves wherever it wants to go. It does not care about you or me. It does not play favorites. It does not discriminate. It does not intentionally harm any one individual. The market is always right.
Lots of times we miss the market move because we’re focused on what the market should be doing, rather than on what it is doing
Fundamentals fall by the wayside when emotion drives the market. That’s why the market can stay overbought or oversold for an extended period of time.
Remember, Markets don’t go to moon. They will stop…but for gravity to kick in…euphoria needs to build up.
Euphoria never builds up in prices but in state of mind of market participants. Once it builds up – it reflects in complacency [writing naked puts, buying unlimited calls, going overboard on building trading positions].
Complacency is a required condition to puncture euphoria. [No matter how smart you are, every human being is vulnerable to mass hysteria.]
Please let me know your views. Do give your feedback.
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