Thursday, August 20, 2009

Indian stock market technical trading calls BSE NSE Future Option based on technical analysis

Investing in stock market remains always a strategic decision as it is not giving you a positive returns every time. But at every rally in stock market, many people think that they have missed a good opportunity. On the other hand many people stay invested when the sensex reaches the possible peak and near term profit booking seems to be on card, they stand still and did not want to sell a single stock as they believe there is still a lot of value in every stock in their portfolio and for them the correction must be a very short lived one and the next rally is going to start without much of a time. This concept is very painful when the stock market crashes by 30-40% in a very short time. Booking profit at the right time is as good as booking loss as opportunities are always present in the market either on the buy side or on the sell side so one should take advantage of the opportunity present at the given point of time. Yes that’s right at the given point of time is the right word in the context of today’s volatile market as the stock which is beaten down in the morning session of the market may turn out to be a big winner and top on the list of gainer at the end of the day and vice versa.

Although it is not always possible to time the market at every occasion but still one can time the market on many occasion. The balance sheet of the individual will present the risk taking nature of the individual. Taking high risk may present you with a heavy gain and on the other hand may damage your balance sheet heavily. But then stock market is all about risk and return so calculated risk is the better way when investing in stock market.

Calculated risk for the stock market could be understood as the level and amount of risk one is prepared to take in anticipation of a better return whether you are a day trader or investor doesn’t matter much.

Technical analysis is the most important method of predicting the current and near future market movement. Based on very common fundamental of demand and supply which act as the base of stock price movement and over all market movement.

Fundamentals do play a role? Yes fundamentals and news flow (positive or negative) for the stock do play a vital role in deciding the price movement in a particular stock but this can be judge by the technical analysis first. For example if any news flow create a significant movement in a particular stock during market hours that news may not reach to the person who is working at remote place or somewhere in the office even a trader who is sitting in front of a computer screen and watching the market movement live and if he is not having any idea about the technical level for that stock may not read the movement of the stock but if he is following a technical analysis method for market study he can easily spot that movement and take advantage of it. May be he will come across any news flow for that stock after some significant action already taken place in the stock price, or after the close of market hours or may be next day through news paper or some other source. But if he is considering a technical analysis method for market study he can immediately spot it.

When people see some unusual movement in a stock or market direction not favoring to their expectation or what looks shiny for other international market looks gloomy for the indian market people get surprised and does not find it appropriate or don't find any significant justification for it. The best way to describe this is to take the case of how the indian market traded on 10/08/2009 when most of the international market trading in the green (asian market) and very good close given by the european and US market our market opend in the green but slide down in the red and the selling was intensified at the close taking the sensex down by 150 odd points but from the technical side this is not at all unusual. This is one of the best example where technical analysis finds it's importance.

Technical analysis is based on past data of BSE & NSE. Technical analysis can be done for individual stocks and various indices like sensex, nifty, banknifty, CNX IT, CNX Midcap, Nifty Junior, BSE 500, BSE PSU Index etc. Here reference is taken of BSE and while refering to calls one has to consider the quotes from BSE especially to confirm the target and stoploss. One most important thing one has to follow while selecting the calls is the target-I price or TG-I as sometimes the target price has been achieved at the opening trades and thus the call get closed for that stock this is very important as once the target price is met the stock may not reach the target price once again on the same day but on most occasions the stock hit the stoploss on profit booking. As the calls will be sent much prior to the market opening timings the selection of call will rest with the individual investor. As the calls given here are just providing the trend indication and actual performance of the call will depend on individual's skill and experience of the stock market. The call provided can be viewed as trading call, will contain Stock Name, BSE Stock code, Last days close price, buy price, stoploss, target-I, target-II, min. expected profit, max. loss although call get closed on achieving the target-I price but on some occasion the target-II price (if given) may also be achieved. Target-II price is just given for reference and investor should have to decide whether he wants to hold on with the stock. Future Option calls will also be given.