Bottom and Top Formation
While reading stock charts, one must make it a point to check the bottom and top formations of that stock/index. These define the trading ranges of the stock/index. The present negatives/positives are priced in by bulls and bears and they settle down at a price where stock/index trades in a very narrow range. This goes on for a long time and then either the bears or bulls get nervous and start unwinding their positions. If bears start covering their shorts then bottom is in place. It is time to go long. If bulls close out their longs then a top is in place. It is better to sell out or go short (or do nothing if you are an investor).
Our Nifty chart is showing signs of a bottom being in place. Trading is in a narrow range. There is an up day followed by a down day. But gradually bottom is moving up. I think it is time to be optimistic and go long. Many blue chips are available are attractive prices. They may soon start their rallies.
rgds
Vibhas
PS. I have been slow in updating this blog because bottom formation was to take place. As rally starts I shall write more often. So please check this blog everyday.
Posts
2 comments:
Thanks Sir. This was article at the right moment. Many investors like me are confused to buy and what to buy how much to buy is this roght tome to buy or sell.
Dear Vibhas Sir,
How are you?
I would like to know further move that SBI and TITAN could get from here onwards.
Both have risen about 10-12 % from dips. Shall one book profit at these levels in these stocks or should wait further?
Post a Comment