Charts-The Story?

Let's have a look at the chart above. It is a candlestick chart without any of it's parameters like price or volume specified.
If you considered it to be the chart of a stock, what inference would you derive about the stock?. One would certainly say that the stock looks very strong.It is rising for over a year and holding it's uptrend.The immediate presumption would be that the stock can continue rising...

The chart is that of the daily price movement of the Nifty for the past one year.It certainly looks strong heading into 2010.

Let's take a look at the weekly chart of the index for the past decade.

Now see our blue line is being supported by our decade long brown trend line.Now one can safely infer that the market would remain positive till we get a weekly close below our brown trendline.

Many a time we squander profits or end up with losses by looking a the micro picture.No wonder day traders have the biggest loss-win ratios in the market and investors walk away with the biggest gains.As a trader, short term or long term, a proper understanding of your trade in the context of the time frame helps convert that loss into a profit, other parameters being right.

What are these other parameters?The crash of 2008,put an end to the much talked about decoupling theory. It is now very clear that our Indian markets are affected by multiple economic relationships across globalised trends.Hence an upmove in Oil or copper or the Dollar as well as interest rates across the pacific can have a bearing on the sentiment here.

Through this blog, I intend to utilise the intermarket relationships amongst markets to bring to you profitable opportunities in diversified stocks and indices.