Friday, December 31, 2010
Presently, Nasdaq is trading at 2660 levels. Earlier, in 2007 it tested a high of 2870. That level 2870 is likely to be the next upside target of Nasdaq. In the downside the level 2550 is going to be a strong support in the near future. For another 2 to 3 months it is likely to trade between 2550 and 2850.
In the medium term a correction could be possible towards 2100 from 2850.
Wednesday, December 29, 2010
On contrary , if breaks 11300 and trades below that level, then it is likely to decline towards 10900 in coming weeks. Futures traders can hold their longs with a stop at 1130. And fresh Shorts can be initiated when Dow rallies towards this level.
The long term trend continues to be bearish. Dow is likely to make major top in the middle of 2011. Until then, one can hold their investments.
Monday, December 27, 2010
If the index breaks 3660 in the short term it is likely to remain bullish and in the upper side it would try to test 3800 levels once again. On contrary, if it fails to move past 3660, then it could all set to test 3520 again.
Right now, the trading strategy should be based on the level 3660. Traders have a eye on that level to initiate short or long positions.
In the long term charts, the index has moved past its 2008 high of 2850, and made an all time high at 3800. Technical analysis of the index shows it is going to top out in this year 2011.
The European Indices rallied in 2010 but the magnitude is less when compared to the Asian Markets. Many Indices in Asia moved past their 2008 highs. Srilankan Stock indices moved passed their 2008 high. Indian Market came very closer to their high, but so far it has not crossed that levels.
Since Stock Market prices reflect the future perception of the Market, continuous underperformance foretell a big correction in China’s Stock Markets. If the fastest growing economy in the world, china, doesn’t see their indices move up, it cannot sustain its growth.
In US, the markets rallied, but is has not rallied as much the Asian markets moved.
Saturday, December 4, 2010
Types of Insurance
This insurance is to cover your life. You can have a term insurance or a endowment policy.
In term insurance, you will get coverage but you will not get any money back. But the amount paid here is very meager.
In endowment policy, you will get coverage and also some many back in a future date. But the premium here is more than the term insurance premium.
In this policy, in case of any accident, the amount insure will be given. Otherwise, you wont get any return.
In this insurance, the cost of repairing the damage or theft, the life of the driver and the life of the third party who is injured by the vehicle will be covered. In case, if none of the above it claimed, you will not get a return.
This policy is to cover all your medical expenses.
A person should take all these policies to secure his family from any unexpected events. In particular, the breadwinner of a family should compulsorily have these insurances.
Friday, November 26, 2010
Thursday, November 25, 2010
Saturday, November 20, 2010
Saturday, October 23, 2010
So, in the first year, a major chunk of the premium goes to the company and a small amount of the premium is invested in stocks and a small portion is taken for the term insurance. From second year onwards, the administrative costs will be reduced substantially and the balance will be used for investment in stocks and also for the insurance.
If the premium is paid for a long period, at the end of the maturity, one will get a good return. Will this investment option get benefit to the investors? Stock market investments are destined to give good results in the long term, say, more than 10 years.
But people attracted to these plans only during bull market. Their investments get eroded in the next bear market. Now they get confused whether to hold or get rid of it or to invest more. As I said earlier, stock market are bullish in the long term, always, and it will give good results in the longer run. So if an Investor continues his investments even in bear market surely investment in ULIPs will be beneficial.
Monday, October 11, 2010
Now the same Bench mark Index Sensex is trading well near its all time high of 21150. When Sensex was trading in 2008, its PE ratio is 21. It was at that time a high Price to Earnings ratio. Historically when ever Sensex trades above the PE ratio of 20, it tops out.
Now, with Sensex trading above 20000, already the PE ratio has crossed the 21 mark and it is trading well above that. Fundamentally, a top has to form around this level. Technically speaking, a double top formation is a possibility. Technical and Fundamental indicators point to a top at this level. Sentimentally, euphoria is seen in stock market circles. The continuous flow of FII funds in the market is boosting the sentiment. The bullish sentiment has reached the levels that was seen in January 2008.
I feel it is the right time to withdraw the funds from stock market. With everything getting saturated, a bullish sentiment alone cannot take the market further. So a correction is going to be there in the near future.
Protect your capital and don’t get sucked into the crowd. Beware, in stock markets, crowd is always wrong.
Monday, September 20, 2010
Will this act stop US from going into recession? If this is the question, then the answer would be good ‘NO’. The Global Economies suffered a setback in 2008 because of the crash in the stock Markets world over. The stock Market Crash has jolted the US and European Economies in particular.
Ever since the crash, the Asian and South American Economies improved and their Stock Markets rallied to their 2008 levels. But the US and European Economies seen little improvement and their Stock Markets rallied but not to the level which it was seen in 2008 January.
Since Stock Markets in these countries never rallied much, the liquidity, business confidence, job conditions have not improved. This percolates into their Economies which in turn is looking weak right now. Banning Outsourcing by the US companies in no way going to improve their economy.
Actually, it is likely to impact badly their economies in the Future. The performance of the US Companies depends upon the cost cutting measures they are taking. Stopping outsourcing will surely increase the working cost and it will be reflected in their bottom line. A weak performance of these companies will further dampen the US Economy.
Saturday, September 4, 2010
In a expanding triangle, the first upside leg is followed by a first downside correction and it will be followed by the second upside leg by the second downside leg. The second upside and downside will be bigger than the first upside and downside legs. The third would be bigger than the second one.
The present technical setup of Gold shows, it is in the third upside leg and it is likely to be followed by a third downside leg and it would be the big downside in last 4 years since 2006. If that happens then Gold is likely to fall towards 900 USD in another 1 year.
Any market has see a bull and bear market. We have already seen bull market. So surely there will be bear market in Gold also. No one can take the rally in Gold as granted. Investments in Gold and related products should be avoided at this juncture.
Saturday, July 31, 2010
The next thing is booking profits early. Even though it is not as evil as running the loss, it too have the same financial disaster. If you couldn’t make big profits in the long run, then what is the use of trading in the markets, that too with big risk associated with it.
Be a trader who book loss early and allow to run your profits. As legendary trader Jesse Livermore said ‘ Sitting right and sitting tight ‘ will give good profits in the long run
Wednesday, July 21, 2010
The Government of India has shortlisted five symbols to finalize in one symbol from that. Finally, the symbol designed by Udayakumar from Chennai has got the nod of the government and he was awarded Rs 2 lakhs cash prize. Now the Government has to seize the opportunity that is being created in International arena as an important world power to market the symbol in financial world to popularize the symbol.
The Re symbol is not just a symbol, it is the symbol of India's pride, importance and dominance in international arena. We all know how the USD $ and Euro are dominating the world trade. Hope the Indian Rupee will rule the world one day.
Wednesday, July 7, 2010
Monday, July 5, 2010
In 1909, 'The ticker and Investment Digest" Magazine reported they had oversaw his trading for October of that year and it included 286 winning trades and 22 losing, a win rate of 92%, which is unthinkable even now.
He also hinted what ever happened in stock market had happened earlier. He said, ‘History always repeats itself’. Later, he used astrology in predicting the stock market movements. And also Gann described the use of geometrical angles in the stock market.
After acquiring a huge fortune, he started teaching students of Technical Analysis. He wrote the following books;-
- How to Make Profits Trading in Puts and Calls
- 45 Years in Wall Street
- Truth of the Stock Tape
- How To Make Profits in Commodities
- Truth of the Stock Tape and Wall Street Stock Selector
Saturday, June 26, 2010
If you are interested in Technical Analysis, then these following sites would be of more helpful to you.
Here are some of the must read books on Technical Analysis and Investing
1. Technical Analysis explained – by Martin Pring
2. Elliott Wave Principle – by Robert Prechter
3. Reminiscences of a Stock Market Operatior – by Jesse Livermore
Still, there are some more interesting books. I will mention it in the next post.
Friday, June 25, 2010
If you look at the charts of any sector which has undergone a bull market, we would find the previous bear market to that bull market would be mild one. Which means, the sector that is going to undergo bull market is likely to see a not so strong bear market.
If it sees a strong bear market, it would not be possible for that sector to climb such a big height to lead a big bull market. So, the previous bear market should be a mild one. Going by that case, then we can find Pharma, FMCG, Banking Sector didn’t see a big bear market during 2008 bear market.
This indicates this sector is likely to lead the next bull market which is likely to start in 2 or 3 years, worldwide. Investments in this sector is likely to give good returns in coming years. Be smart when it comes to investing.
Tuesday, June 22, 2010
If any body buys stocks using margin money and sells the stocks on the same day itself, then it is Intraday Trading. Here buying and selling is done on the same day itself. The quantity may vary according to the trader. The intention of a day trader is to use the movements in the intraday to make money. Personally, it is the toughest trading in the Market.
Positional Trading or Swing Trading
If a trader takes a long (buy) or short (sell) position in the futures market and holding it for more than one day, then it is positional trading. The intention of the positional trader is to make use of the short term price movements of the stock, either in the downside or in the upside. The difference between day trading and positional trading is, in day trading one can use the intraday movement only and the positions are closed on that day itself and also the intraday movement will be less when compared to short term movement but in positional trading the swing in short term would more than the intraday movement.
So automatically, the profit or loss potential is high in positional trading. Those who has high capital can trade the market positionally.
Momentum trading is done by traders who interested only in big moves in the downside or upside. They wait till they anticipate a big move. They don’t trade all the time. This trading also has its high risk. If the trader fails to anticipate the correct direction of the market, they he will end up in huge loss unless he cuts his positions immediately.
Select the trading style that suits well your personality. Happy trading
Wednesday, June 16, 2010
I could see at least some Technical Analysts could vaguely register their suspicion of a impending top in Stock Markets.On contrary everybody was bullish on Stock Markets at that time. Now check what the media has said during October 2008 crash. Now at this time, the whole world media was bearish on Stock Markets. The reverse happened here. Nobody warned of an impending bottom at that time. The Markets world over rallied from October 2008. This shows the mainstream media is always when it comes to report about the market.
The main reason for the media to get caught in the wrong side of the market is because of the technical position of the Market. When majority of the Market participants are bullish on any market, the main stream media is also bullish on the markets. But technically, when every body is bullish, market would have reached its full buying potential. So this lead to change of trend.
For Investing in Stocks, don’t follow what is media is telling you. Take your decision on your own.
Tuesday, June 15, 2010
Monday, June 14, 2010
Sunday, June 13, 2010
2) While opt for Insurance plan according to your financial condition so that protect your assets too.
3) Check your current policy premium and coverage and compare it with other agencies and competing quotes from Insurance companies.
4) Most of the auto mobile Insurance companies offer a variety of Insurance with covenant payment option.
Saturday, May 22, 2010
Now a days the most of the developments are focused in and around the cities only which reflects that all developments and infra structure planned for the cities only, Hence the population growth of Mumbai will raise about 74% because of the increase in labour opportunities. Because of the population explosion in the cities the government has to spent more for the infra structure and the basic amenities for the people. Comparing with China we are spending very less for the infra structure.
For this only the government has to spend at least 112 Lakhs Crores of rupees. If the Government is more focused about the metropolitan cities then the villages and the towns will be completely in the neglected state. Which will give a negative impact of our economy.
Hence the growth of the country will be sustain and lead in a positive trend if and only if the growth is in all aspects, irrespective of villages and cities. There should not be a discrimination between the cities and the villages. The Government has to plan and focus more for the development of villages which will result in the uniform growth of the country.In other words un uniform growth will only lead to the negative impact only.
Sunday, April 25, 2010
But Suddenly, the ashes from the volcanoes of Iceland brought the movement of Airlines to standstill in Europe. The flights passing through Europe from other Continents were also affected due to this. This has come as rubbing salt in the wounds for airline industry. Almost all the flights were cancelled in Europe which is the center point of Air traffic in the world.
With the Economic conditions are not improving and it is standstill in many countries, the revival of Airline industry is looking bleak in the near futures. Investors can avoid making investments in Airline stocks are the current level.
Saturday, April 24, 2010
Monday, April 19, 2010
Based on any single indicator or multiple indicators, the system generates buy and sell signals in Intraday, Short term and Long term. A trader by himself, without studying the technicals of the stock, can do buy and sell based on these signals. A manual study of these technicals is a cumbersome process. A trader no needs to experience this hardship to trade in the markets when he uses this Automated trading system.
Will this automated trading system really help a trader in buying and selling in the Markets? The Answer is simply no. Because, the first thing is, the market movements cannot be gauged in mathematical formulas. The market movements are random and it cannot come into the gambit of formulas.
Even if there is one, the discovery of that formula would have been already discounted by the Market. Unless you study the markets manually and understand the nuances by yourself, no one can make profit out of the markets.
Wednesday, April 14, 2010
The US Stock Index Dow Jones made an all time high of 14,279 on October 2007 and it was followed by a crash towards 6440 in march 2009. The crash to that level was followed by a rally towards 11000. Today it has made a high of 11038. Now the Million Dollar question is, will Dow move past 14000 in the near term.
Fundamentally speaking, though the financial situation is under control, it has not fully recovered from the recession. Though some indicators are improving, it really doesn’t reflect the growth we have seen 3 years back. The fundamentals have not improved as the stock prices. When everybody is bullish on Markets and Economy, a major top is likely to form. The same situation is prevailing now also. Every where we can see optimism. Nobody is talking of badtimes which has happened only one year back.
Technically speaking, the crash in 2008 is followed by rally in 2009 which is very quick when compared to the previous rallies. It means it is V shaped recovery. These type of vast price movements are always seen in Market bottoms and Market Tops. Since the present volatility is taking place in a Top area, the present technical situation is better construed as a top which indicates, the present rally is likely to lose steam in coming weeks. Going by the technicals, it indicates Dow is unlikely to cross 14000 for another 3 to 5 years.
Retail Investors should be carful at this time. They should stick to the law, ‘Buy low and Sell high’. Right now the we have to sell high. The impending top is around the corner. Be prepared for the event. Don’t get buoyed by the Euphoria in the Markets.
Saturday, April 10, 2010
If you look at the countries which are affected by terrorism, it is evident that those countries are not developed yet. Terrorism is caused by religious belief and social disparity. In developed countries, we rarely see terrorism except because of religion.
In Europe, Spain and England are affected by religious terrorism. But none of the European Countries is affected by terrorism that is borne out of social disparity. This is because, the development in these Countries are homogenous and their society is not separated by casted and creed.
It is not the case in India, Pakistan, Sri Lanka, Nepal or Afghanistan. The society in these countries are divided by caste, creed and religion. That is why we see Maoist struggle in India and Nepal and bomb blasts in Afghanistan, Pakistan and Sri Lanka. The main problem in these countries is the social disparity the communities. It is wide open in these countries.
That is why the internal clashes are happening frequently in these countries. If the disparity between the communities in this countries are reduced then automatically the social unrest would come to lower level. Instead of decimating the terrorist, if the Governments in these Countries decimate the social disparity, the menace of Terrorism would be rooted out completely. But no Government seems to move in this direction.
Tuesday, April 6, 2010
We are living in the Digital world, most of our business, financial and social communications and its developments are through the internet only. These digital contacts and communication are called us digital Assets or Virtual Assets. In other words, the emails, passwords electronic documents, websites and Blogs, other files either in Web or in Computer is called as Digital Assets.
Suppose the Virtual or the Digital asset holder dies unfortunately all the virtual assets could be frozen, since it could not be accessed by his successor or his legal heirs. Further if the successor wants to access the digital documents and he approaches the court he has to submit the succession certificate and many other legal identity and password which is a cumbersome process. Here I wish to remind you the password are subject to change more frequently. And if the legal heir approaches Google, Yahoo or any other service provider, how they can be judge the claim?
Here the Digital Will helps. Digital Will is an electronic document similar to that of a Physical Will in other words is a Will for a Digital Assets. Unlike a paper will Digital Will, will be stored on a safe and secured service and can be updated easily. Now there are more online service providers are available with competitive tariff structure. As this is a new concept they are now structuring a common procedure to less the pain of the legal heir.
Last but not the least word, there are so many legal issues are there in between Last Will and Digital Will. In England Last Will cannot be replaced by a Digital Will.
Monday, April 5, 2010
Trading is a mind game. Having said that, each trading person has different mindset or personality. The most important factors that decide the personality is Emotion and Logic of the Brain. Some take decisions emotionally, and some take it logically, while some take it partly emotional and partly logical. Some have a very disciplined mind and some don’t have that mindset.
So, which one is the best personality to trade in Stock or Commodities Market? Once a trading Guru in USA, trained both ordinary civilians and some former US Marine Soldiers. He taught them to trade in stock markets using Technical Analysis and Fundamental analysis. He trained them in short term trading in Futures and Options. He taught the students where to book profit and where to cut loss of a trading positions. After some period of time, the Guru asked the students to trade on their own in real time with real money.
The results are some what astonishing. The former Marines performed well in the trading than the other students. The Guru analyzed the results and come to know that the former Marines are most disciplined and they followed the trading rules correctly with out fail. That is, because of the discipline they used to follow in military training.
This gives the conclusion that those who follow the trading discipline correctly without any emotion is likely to trade better in speculative Markets.
Are you the one who trades with discipline and logically?
Saturday, April 3, 2010
Thursday, March 18, 2010
In India, when it got independence from the British, the Government was in the need of building Industries and Business to promote industrialization in the Country. At that time it didn’t have many Entrepreneurs and Industrialists. So Government took the initiatives and started many companies and Industries in all sectors. At that time, the Government is following a socialistic type of Government. So at that instead of encouraging new Entrepreneurs, Government itself has started all the Industries.
Those industries which were started by Government started running successfully and it contributed to the Industrial revolution of the Country. But as the Country progressed towards 1980 and 1990, there was a steady decline in their performance. The Public Sector Undertakings had started to behave like Government departments and that was why their performances declined during this period. But at the time, lot of private companies have been started and lot of new Entrepreneurs have grown in private sector of this Country.
This led to fair growth in the Industrial development of India. But the performances of many Government companies continued to decline. Some companies had gone sick at that time. And they became a burden for Government. After 1990 , the Government started disinvesting these Companies to private sector and they once again started performing well.
In USA, except finance and defense, every other industry is privatized. Because of this from 2008 many banks are failing in USA. But in India, non of the Banks failed.
I believe a Economy which is partially Market, and Partially socialistic, is good for any developing Country.
Saturday, March 6, 2010
It is rumored in the media that United Kingdom is under financial trouble. Morgan Stanley the well known Investment Banker from USA has written a note, that UK may be in trouble in coming years because of fiscal creditability. The current economic situation may force the Bank of England to raise interest rates.
The high interest rates would be bad for the British Economy. Like this many European countries are under financial pressure. Now, many say that the recession is over and hereafter we are going to see steady growth in world economy.
The fact is, it is not over, and it has just started. It started in US with series of Bank failures, followed by Dubai crisis and followed by Greece crisis. Now we are hearing about UK.
This really foretells that World economic recession is not over. It has just started. Just the beginning itself has created lot of job loss in developed and developing countries. If it continues for another 3 to 5 years, then the situation in coming years will be very worse than 2008.
If this happens, then nobody’s job is secured. So be prepared for that.
Monday, March 1, 2010
I see that many websites and blogs have started to analyze and forecast Stock Market movements based on Astrology. Those persons who are behind these websites believe that they can forecast the market movements based on planetary movements.
I do learned astrology as part of improving my technical analysis skill. I came to know that the slow moving planets like Jupiter and Saturn influence most in analyzing once horoscope. And also the movement of this planets influence major events in the world. Other planets like Mercury, Venus, Mars which are fast moving planets and they influence least when compared to fast moving planets.
Stock Market movements are governed by demand and supply. The difference in the demand and supply makes the market to swing here and there continuously. The oscillating movement starts from intraday and it extends till centuries. Many analyst who are using astrology for forecasting, predict the intraday movements of the markets.
The fastest moving planet mercury takes four months to move from one Zodiac sign to another. I don’t know how a planet that takes four months to move from one Zodiac to another influence the intraday movement in the stock markets and I don’t know the methodology that is behind in predicting the stock market intraday movement.
As far as I am concerned, and also as person who know astrology and Technical analysis , I believe, nobody can predict the stock market movement using astrology.
Tuesday, February 23, 2010
In the earlier post, in which we have written about Dubai and we have stated that this was the tip of the iceberg. Now we are hearing about Greece crisis. Greece is on the verge of collapse financially.
What is happening in Greece and will it end with Greece, or will it take further toll? The answer to this happen is, yes, the toll is likely to continue in coming months. Below I have given the technical reason for that.
Since 1929, there was not a big bear market in the world Markets. We have seen bear markets during the past twenty years, but, they were not as worst as the bear market in 1929. Various Technical studies say we are likely to see a big bear market of that magnitude in near future.
Any market would undergo a correction of larger degree every 100 years. Since 1929, we have not seen any major bear market like that. The 2000 dot com bubble burst and 2008 reality bubble burst are foretelling a big correction ahead.
Be prepared for it.
Thursday, February 11, 2010
I have been a trader in stock Market for the past 10 years. Whenever I introduce myself as a stock market trader to any new people, they just blink at me and look at me somewhat skeptical at me. The reason is simple. If you are a trader in a speculative market, people look at you as gambler.
Gambling is different from speculation. Playing cards and betting on horses is a gamble. In this two, you are betting on a thing whose performance is not in your command. You are betting on a performance, not on any asset.
But in trading, you are putting money on an asset i.e. stock. The money you have invested in market is backed by the fundamentals of the company. More over you would have invested in that stock after analyzing the performance of the stock fundamentally and technically.
So, here the outcome is predictable. But in gambling the outcome is not predictable. So if the outcome is predictable, then how can we say it is gambling if we trade in stocks.
Every business is risky. The same risk is associated with trading in stocks also. Then why some body say it as gambling. So, stock trading is also a business as some other business.
Friday, February 5, 2010
Ever since gold made a high around 1220 USD, it is declining from that level and recently it touched a low around 1050. Is this the high for another 5 years? or will it rally again above 1220 to make a new high in coming months? This is a million dollar question right now?
Almost all the fund managers and Analyst are bullish on gold and they are advising their clients to buy gold as investments. The consumption of Gold by China has exceeded the consumption of India. And it is being stated as one reason for the rise in Gold. And also it is been said by Market pundits that many central Banks would also start buying Gold for hedging purposes.
Irrespective of this, what does Technical Analysis say about future price of Gold. Technical Analysis would really predict the future course of the Gold Market. We have seen in many Markets, the top would be formed, when everybody is bullish. So once everybody has invested in Gold, surely the prices are going to decline. No market would continue to rally or decline forever. The markets need to consolidate while rallying or declining.
As the same case, the Gold market has to top out somewhere now or then. But going by the technical analysis, it says a top is already formed. So, in the future, Gold is unlikely to move above 1220 at least for another5 years. From here, it is going to decline further towards 800 USD in coming years.
Be careful when it comes to investing in Gold.
Saturday, January 30, 2010
The main aim of any small business or a corporate company is to build a brand. Building a brand is of prime importance than making money in the business. Of course, everybody in the business is here to take profit from the business. But before taking a profit one should build the brand for their products. Without building a brand, taking out the profits will surely sustain for short term.
If you want to be in the business for long term, first build the brand and get the confidence and loyalty of the customers. Coco Cola and Pepsi, when they entered the Indian Market, for the first five years they spent lot of money in building the brand image. They never broke even for the first five years. Think of a Company which invested lot of money in one company and they never get paid for the investments for the first five years.
It may look ridiculous initially, but they have built a brand image in every household in India. From urban population to rural population in India, everybody knows these two brands. Initially, they started with their core business of beverages. But after having built the brand name, they have started introducing other food products also.
They have slowly entered the snacks market in India. First they penetrated the urban market and they slowly penetrated rural market also. Now the traditional snacks in india is being replaced by these snacks. Such was their brand image, which could even change the way of life in one country.
What Coke and Pepsi did in India is brand building. They did for the first five years and now they are reaping the benefit of brand building. You too, if you are interested in starting business, build the brand first, and then make profit out of it.
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