As the markets are threading lower lows our NH-NL index has been giving higher lows. this is an indication of a short term reversal in the markets. Markets don't go in a one way trajectory, it always moves between a path called over value and over sold. At present it is in the oversold zone, though not fully. A small rally is expected and today seems the day for it. Intraday trades can go long on the Nifty to take a small opportunity. Stop losses are a must with any kind of signal, probabilities can change and make any trade a loser. And when the broad market is bearish, a counter trend trade will need guts to trade. Hence, risk as low as possible and reap fast rewards.
New highs were in 9 stocks and new lows were in 34 stocks. And as usual it is General Finance industry group that has more number of new highs, followed by Power Generation & Distribution and Engineering Industry groups. A slew of results coming up are changing the ranking map for good. The churn of names have began to happen, but toppers do not have smooth pattern of numbers. There are erratic jumps in earnings which bring the stocks to top ranks. These stocks had been losers in the last year and hence when they make small gains, in comparison the result show great strength. Volatile earnings growth does not augur real strength.
Though still some GEMS can be found in the stock pile. We have to be highly selective and trade only in the best of best stocks. As the broad markets move into bear zone, top ranking stocks too will shed some of their gains, come into a consolidation and give an opportunity to trade long when they break out of their consolidation patterns. Stocks like MINDTREE, MRF etc are good bets. Have a close watch on these stocks and their patterns. Wait for the right opportunity to get an entry.
As many stocks have established themselves into a clear bear trend, any rallies from here will provide shorting opportunities. Take positions into the strongest trending stocks to make fast bucks. There is a saying 'Bulls claim by the stairs and Bears jump out of the window'. Bear markets are a beautiful chance to make fast earnings.
Have a great trading day.
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