Re: Todays Buy Levels
There is a lot of talk in traderji about bear markets but just thought of airing my views in my friends thread....
Bear markets are usually triggered by the price breaking long-term (usually 3- 5 year) uptrend line... Once the uptrend line is broken then higher low pattern is in question. Then starts the reversal channel ( have a look at enc. satyam charts the reversal happened in mid-2007 ) which has a lower high -lower low pattern ...Ultimately even though the up trend channel becomes a down trend channel in a bear market we can still look to buy at the channel support (which connects reaction lows ) and sell at the upper end(connecting reaction highs).
My point is for a trader who plays in the cash market(where we cannot hold short position barring intra-day ) the basic approach doesnt change immaterial of whether we are in a bull or a bear market... we will still buy channel supports (keeping stops in place)and sell when price approaches channel resistance .
As the year 2008 progresses we may find more stocks following the lower high lower low pattern already visible in most IT stocks but that doesnt mean we cant make money..
Asish,
Happy to see you with moderators tag...