Friday, May 1, 2009

Market up by 400 points........

Market went up against all analyst view.No one thought that market will go up by 400 point.That was a HUGE move.
Well, I was discussing about our market at some other place.They were also surprised by the move but someone wrote before Wednesday that distribution is taking place.
Well first we need to understand what is meant by distribution.The word distribution is used when market use to go up fast on low vol and then tanks on high Vol.It means that player who wanted to come out of the position they are stuck in takes the market up with Low Vol and then takes it down selling their holding with High Vol.
It also means that market players , known as stornger hands, wants to quit from the market and hence they are selling it to small investor who do not know where market is heading and thus making them a scapegoat.
Now what we need to look at is, whether the market went up on Low Vol and tanking on High Vol?I think that is the only way one can define Distribution.Taking market on Low Vol as stronger has not to buy more and hence Low Vol otherwise they have to first sell what they bought to take the market up and hence Low Vol and market goes down on high Vol as they are selling their core holding which they wants to sell at anyhow.......

The view there was that stronger players were taking this upmove as a chance to move out of the market as they feel that market will tank more and make a new bottom.
Now we have often heard from analyst stocks are going from weaker hands to stronger hands or from stronger hands to weaker hands.
So one of the member was having a view that the stocks are going to WEAKER hands from STRONGER hands as he felt that marker has runup enough and that the intermidiate TOP has been made and market will go below previous low.
I do not buy that view and I have reasons to believe that.I am writing the point here why I feel the otherway.
1)The valuations are so low that Bulls has the courage to move the market at WILL and move the market and stocks up and hence our market is still a SELL is not accepted by everyone(e.g.FII,DII,HNI,HF etc).This has not happened in last 15 months which has happened on Wed.(This type of movement use to happen in BULL Market if one remember properly.)

2)The global scenario is improving and hence bears are not able to sell their story of a prolonged Bear market which can last for YEARS.

3)Market is oversold very heavily in futures perticularly in Nifty.

4)Indian Economy is showing sign of consolidation and there can be no more casualty from hereon , not atleast much bigger to take the market back to 8k or below.

I also personally thinks that , at this level where the prices are down by almost 90% and over in Cash gr and in A gr it is also almost 70-80% down , there can be no distribution taking place but only accumalation can take place.If we just take a logical view , then say, what one need to do in Jaihind Pro or PSL Ltd where the value has come down drastically and what the stronger hand has to distribute at this level?I am surprised by this view that stronger hand is selling and stocks are going to weaker hands! no point I am getting convinced at this price level that stronger hand has to sell their holding to weaker hands........

I feel and view that stronger hands are not that much weak to sell their holding as soon as the stocks doubles as seen in this rally as many stocks have doubled from their lows.If stronger player has come into the play then they will target for much higher return and there is no alarm in global economy that they should shed their and so soon......

I am sometimes surprised to see these type of view and some times makes me laugh at it.
I think the upmove is still intact and we will see more new highs from hereon.
I again reiterate my stand which is ofcourse my view that SENSEX can cross the previous high by Dec 2010.I have written these a week or so before and I am glad to read that one of the stock market site who write only fundamental view has wrote on its site that 21k can be crossed by Dec 2010 if UPS again comes to power.
It is known to all who read my blog that I do not believe in technicals.I have written many times here and elsewhere that market operators are not fool to let one earn in day trading.They sit with a technical analyst and move the stock in such a way that your SL(Stop Loss)is LOST......One can try that on terminal.Put a SL and it will be eaten up invariably and then the stock will go up.
Someone told me that our players makes the chart instead the chart showing the way how market will pan out.I said then why we are following charts?If Indian Market players are so smart to move market and makes the chart then no need to follow technicals.
Whatever may be the case but after 15 long months we are seeing that Bulls have made inroads in bear DEN......

No comments:

Post a Comment