The most fateful thing that we traders/investors commit is getting carried away by movements on either side. On gloomy days majority of bias is on negative side. On days of pullbacks like last 2 days we get carried away. The worse part is becoming too judgemental on the direction of the market. After the pullback of the last 2 days all what I can hear is worse is over for sometime, we might see a substantial pullback rally etc.
What nobody cares to check is the real picture. The pullback rallies after huge falls are normally very attractive. But what it actually succeeds in doing is trapping the traders in a surprise down move which follows. What I am not saying is that market will fall for sure. But only thing I am suggesting is to be aware of the risks if you have made your mind to go long.
Have a look at the Nifty landscape below. You can clearly see that the Nifty has broken crucial support of 5500 which had held for about 4 months. After a swift down move the only thing Nifty has managed to do is to get close to the break of neckline. Hence by no stretch is this a level where we can say bulls have taken control and the shorts will scramble for cover. So at this point of time the odds are in favour of shorts rather than longs. While the experts on TV might say anything in my opinion it is not the time to go long. Beware the buyer!
What nobody cares to check is the real picture. The pullback rallies after huge falls are normally very attractive. But what it actually succeeds in doing is trapping the traders in a surprise down move which follows. What I am not saying is that market will fall for sure. But only thing I am suggesting is to be aware of the risks if you have made your mind to go long.
Have a look at the Nifty landscape below. You can clearly see that the Nifty has broken crucial support of 5500 which had held for about 4 months. After a swift down move the only thing Nifty has managed to do is to get close to the break of neckline. Hence by no stretch is this a level where we can say bulls have taken control and the shorts will scramble for cover. So at this point of time the odds are in favour of shorts rather than longs. While the experts on TV might say anything in my opinion it is not the time to go long. Beware the buyer!
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