Nifty Levels to watch

Nifty had shown some bullish rally starting mid of July and started falling south last week leading to a big Question about the current bull trend.

One has to watch for this following major support and resistance levels.

Bull Trend is confirmed only if nifty crosses 4476, 4539 as well as 4649 without breaking the critical support level of 4159. If it happens one can witness a non stop rally upto 5200.

One has to be careful on this rally because nifty may fail to cross the resistance level of 4539 considering the current economical factors.

On the other side if nifty drops below this important support level of 4159, nifty will fall to this year's low of 3790 and even new lows.

INVEST vs TRADE 3 (cont...)

Friends welcome to the final part of this discussion. So now every one of us should be clear that "we are not going to be a regular investor blindly investing in some stock for years."

Let us call ourselves as TRADERS.

What is the strategy we are going to follow?

Going to carry a trade (buying & selling) with profit. The duration for trade can be within days, months or years.

Simply "We are going to trade & ride the TREND, based on technicals"

We are going to learn about this in detail under the label Technical Analysis.

Viewers if you have any general market queries mention it in comments. We will be answering them every weekend under the label Weekly Queries (Individual stock queries will be answered the next day in comments itself)

Advance thanks for your comments.

BIOCON

Biocon shows good support around 400 watch this stock for target 439/- shortly.

INVEST vs TRADE 2 (cont...)

We had taken only strong and good companies as example.

In first part Nifty moved up strongly in 2 years period (Jan 2006 to Jan 2008) but why Unitech gave profit, Sasken gave loss and Infosys with no loss &and no gain.

In second part Nifty crashed a lot Jan 2008 to July 2008 but here Sasken gave profit, Unitech gave loss and infosys still remains at same price.

Why we had taken this topic at this early stage is because most of them enters the market by saying I will invest for 3 years or more horizon in good company and will not care about the stock within that period.

Let us consider 3 different individuals each had invested Rs. 10,000 in Jan 2006 & their values on Jan 2008 as well as on July 2008.

X invested in Unitech: Rs. 6,25,000 + (Jan 2008),,,,,, Rs. 2,25,000 (July 2008)

Y invested in Sasken: Rs. 1,870 + (March 2008),,,,,, Rs. 3,300 (July 2008)

Z invested in Infosys: Rs. 10,000 (Jan 2008),,,,, Rs. 10,000 (July 2008).

Every one looks at X and there by investing their entire savings in a single company for longer term say 5 years or 10 years. One factor which really hurts is even professionals, financial consultants and analysts are also recommending this. No one cares what happened to Y and Z.

Few Questions for Today:

Can any one predict and recommend you that "This particular stock will give you exactly this percentage returns in next 5 years"?

Can any one predict the exact price of Gold in next 2 years?

Can any one predict the exact price of Oil in a year time?

World is full of uncertainity and stock market is no exception. So Friends this is not the right place for investment with guaranteed returns in fixed time period. The better place for you will be Bank's FD or RD, Govt Bonds etc...

Those who have risk appetite and ready to swim in the stock market can come with us to learn and get maximum benefit in the coming posts.

INVEST vs TRADE

For all those who enter share market, have a confusion whether to trade or invest. Here we are not going to bet which one is the best but to clear you the pros and cons of both.

Before that just recollect different types of investment(short, medium and long term). One thing which we are not going to deal is about day-trading(needs lot of exposure to stock market)

Let us go with the following examples.

1) Unitech --> Stock Price as on Jan 2006 is Rs. 8/- & as on Jan 2008 is Rs. 500/-

2) Sasken Communications --> Stock Price as on Jan 2006 is Rs. 450/- & as on March 2008 is Rs. 85 /-

3) Infosys Tech --> stock Price as on Jan 2006 is Rs. 1500/- & as on Jan 2008 is Rs. 1400/-

What is your observation?
As a lay man, Unitech is good, Infosys is safe, and Sasken is worst company.
As a professional, Unitech is in uptrend, Infosys is in Sideways trend and Sasken is in downtrend.

Let us come to the interesting second part of the same example.

1) Unitech --> Stock price as on Jan 2008 is Rs. 500/- as on July 2008 is Rs. 160/-

2) Sasken --> Stock price as on March 2008 is Rs. 85/- as on July 2008 is Rs. 150/-

3) Infosys --> Stock price as on Jan 2008 is Rs. 1,400/- as on July 2008 is Rs. 1600/-

What to say now?

Every thing is changed. Unitech is in downtrend, Sasken is in Uptrend and infosys a liitle bit uptrend or exactly sideways trend.

What we are going to conclude from this ???????????

THERMAX Update

Our Buy recommendation on Thermax given on 24 th July is bang on target in less than 10 trading sessions.

Call given at 421/- with target of 458/-

Cmp: 463/- Book Profits