thanx 4 ur view on 52 week hi/lo vv.
Regarding the same till what level can we expect the prices to go up/down.
i.e, till what level might the stock go up/down. Can that be predicted as such?
Infy hit an all time high of 1855 and is now going down for 4 continuous sessions.
When do u think i shuld exit/take profit of this position? Still steam left?
Do u think that giving a long for a stock that hits 52 wk hi is wise? and short selling 52 wk low stock????
Thanx Again.
If U think about it, it works both ways. Lets do the 52 week low again.
Everybody is selling. Stock has been falling for long time. After some time, a stock is worth something that reflects the companies value: its cash flow, technology, real estate etc. So, at that point, is it worth going and shorting. Why do we want to sell a stock when its value is equal or less to that of the company.
Similarly, a value of stock as it goes up happens in 3 stages. In the 1st stage, the value is less than the fundamentals of the company. At this point only few people know about this fact. In the 2nd stage, value is equal to the company's fundamentals. In the final stage, value is greater than the company's fundamentals. The final stage is called the speculation stage. Everybody knows about. Like the stock CLASSIC. Recent example is also GOLD prices.
http://bigcharts.marketwatch.com/in...ddate=&show=true&symb=gld&draw.x=32&draw.y=10
Speculation stage is a good and bad. Good because the stock price increases faster as many people know about. Bad because, sooner or later, there will be correction as the prices get too out of hand. Those people who join late will be hurt. How do you know this stage. From TA point of view, the momentum should tell. From fundamentals, Trailing and Forward P/E of the stock compared to industry and other stocks in the industry.
As I said in earlier posts, its very hard and risky to catch bottom and top. U may forsee stock or market is going to fall. Timing it is very hard. Rather approach it based on your objectives. Be it either entry or profit taking.
Even though 52 week high is good for buying, the risk to reward is much better if you buy close to 50 day EMA. This also depends on the general market. Before May downfall, if you were waiting for a stock to buy at 50 day EMA, you would have been waiting for ever. Right now, most of them are trading close to 50 day EMA. So, there is no straight answer.
This market has been going up. Inspite of that, there are some elements that need improvement. Specially, VOLUME. Also, I see stocks rolling off or going sideways. Rolling off in IT sector: WIPRO, SATYAMCOMP, INFOSYSTCH. Sidways in most of the stocks. Is it consolidation or leg down. Only future can tell. Lets wait for the signs.
