Wednesday, February 25, 2009

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Resuming Posting After a Long Time

I had lost touch with this blog for a long time since August. The breakdown of SELMCL coincided with lot of other things. The worst of recession has happened after that time.

September and October were the two bloody months that the world markets all together have ever witnessed. Lot of unwanted but inevitable things happened during that time. And that has set the tone or upper limit for the markets which haven’t crossed till now. I don’t think they will ever cross that limit.

beautiful beginingImage Source

I had become very busy with my daily work and couldn’t concentrate on continuing this blog. Well, there was no special incentive in maintaining this blog. It was a matter of expressing my thoughts about stock trading on a day-to-day basis. But because of overpressure in other works, I had to put a pause to it. I didn’t know how long at that time.

national stock exchange nseImage Source

Things were only getting worse and I had stopped my trading. I realized that I couldn’t trade the way I used to before. A loss was always unbearable for me and I always cut it when it is small even though painful. I never take diversification. That is a myth. It is like taking alcohol and driving a car. Feels good and safe till the accident happens.

I have learned the importance of organizing information that I had been learning with my trading. I will plan to post them over time. I have written down rules that must be strictly followed while trading. There are lots of ways to find stocks or filter them, for day trading, for trading in the morning or evening and also for short term trading. Long term trading is a phenomenon that doesn’t exist now. I don’t have any hopes for it in the future.

Coming to the present day, I noticed that my broker, Indiabulls, regularly sends an article to give a “morning brief”. This is cool to get some fresh information early in the morning. Indiabulls seems to be doing some best job for their clients.

Today’s news are not breaking news. But there is an interesting news. DLF has cut back its residential project prices by Rs. 13 Lakh in Chennai. This shows that there is a good fall in property prices in popular cities. We need to wait for more action that can spread this to all the parts of a city like the area where I live. Just be patient. That is surely going to happen.

Let us look at the chart for Nifty.

chart of nifty on 25 february 2009Image Source

There is a suggestion that there could be an unexpected uptrend after all the dancing that happened since November. The white candlestick after a “dragonfly doji” day. This is a classic followup. But still the moving average above it shows the resistance. We can safely assume that it will breakdown surely but gradually once it crosses below the magical 2500 mark. It will because the hell is going to break lose like anything we have never seen before. Don’t say not again.

Putting it aside because it is the long term trend, we can see that this time is a pause from the long term trend. These are the best days to start any venture, shift jobs, look for a new office or anything. I think this is the optimal chance. It may not come again anytime soon.

From the general statistics that I track, I checked only the stocks making 52 week high. I found one stock – “Cambridge Solutions”. It is in information technology sector. This is one of those rare, unpopular stocks like the SELMCL. But its volume is lot lesser. Putting the chart below. I think this can be the next good bet.

chart of cambridge solutions on 25 february 2009Image Source

This looks like a nice trend. It is bouncing above its moving average. But my broker may not allow me to buy the stock. There is some restriction in Indiabulls. We can only trade heavily traded or high volume stocks. That sucks, Indiabulls being the best in class brokerage service for trading on National Stock Exchange.

There may be more next good bets lurking in the shadows. It needs some effort to check the older statistics and filter them with various criteria. I will post them as I find them.

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