October Fall it did!

As written in the previous post, october did indeed fall. However the fall wasnt as sharp as anticipated. Infact if at all it was very difficult making money inspite of getting the direction right. As each time shorting was done, there was a huge counter move to wipe out any stoploss put. Finally however for the last 2 days the shorting worked and markets obliged after a long long long time with some decent correction.

Now the markets might be entering a corrective phase, however how long does it last is anybodys guess. Now from now on if we see a 100+ point rally that might be the end of the bearish move. Even today with all the negative the FII's didnt net sell anything. It was the DII that have been huge net sellers.

I would now keenly watch the market to start its upmove after this current downtrend is over. And the indicator to that would be the huge rebound, which may occur soon. Though a point of note is that this curernt downmove might take us to 5600 or it might end at 6000, that is anybodys guess. Till then happy trading.

Will October haunt again?

October usually is a month wherein markets correct and it is more so true in the second half of october, wherin the corrections are swift. Chartically speaking, we have been set for a correction many times in September, but each small hint of correction in September was bought in with full force and instead of the markets correcting, they just went up. This led to a huge difference between nifty and futures of around 40 points. This kind of difference has not been seen for a long long time. Also the put-call ratio in the market in september had reached levels of 2. Usually markets have a peak of 1.8.

Now after some time the charts are showing the correction patterns again. If Nifty starts to break then its 10 days of nice correction and we have a stop of around 5600. If not then theres no stopping nifty from breaking the all time top. But the odds are stacked for a correction now. It might be prudent to short with stoploss in place. If markets correct and reach 5600 then it would be great time to buy for long term investment.