I’m not into Technical Analysis…more a Fundamental Guy…but count as some of my close friends and associates,some leading Technical Voices in our Stock Markets
So as this week closes with the Sensex hovering around 10000 and Obama winning the US Presidential Elections , I was taken aback when these Technical Voices made some very intense,bold and scary Long Term Calls
A leading Technical Chartist ,who heads the Derivatives Desk at a leading Institution and who appears on Stock Channels regularly and is known for his macro calls,more than specific scrip calls has warned that for 9 years Stock markets will remain challenged and whatever big fall will happen…. will happen now in November itself
A Rare Technical Report from a leading Securities Entity has studied the Sensex trends for the last 30 years and made a call that the Sensex shows weakness as it has breached earlier in 2008 a five year support line and in early October has breached the 50 months average….Sensex has now entered a structural bear market….It will fall to a range of 5720-6750,eventually finding support in the range 6150-7150…Pull Back Rally can first take it to 11500 before it resumes the fall again…This is their BOLD STRATEGY recommended
Only Trade and do not Invest
Do not average purchases
Aggressively Sell off Portfolio
Short the Market at Higher Sensex Levels
Trade Long on further 10%-20% upside with Strict StopLoss
Another Technical Chartist,a Lady, who breathes the markets daily before she even breathes in oxygen, and who depends on Time Series Analysis, has said that the Sensex will tank in November,pull back in December and after January 10,2009 will resume it’s fall big time in 2009….Sell and Short significantly in the December rally is her advice
So,if Technically and Fundamentally markets are projected to remain weak and challenged in the Short,Medium and Long Term can one hope to earn well in Equities from now on without Shorting them,but actually Investing in them ?
I believe one can….with astute selection of scrips invested at their distress prices…at a Sensex level of 8k and below you’ll see these prices emerging on BSE….so even if the macro Sensex remains depressed or range bound ( check out my Sensex projections for 2010 on the Pages on the right), the scrips selected would outperform the sensex
So one scenario is clear !…..you will not see a Sensex level of 20000 for a long, long,long time !