Sensex has given the first indication of weakness with a dip today and a quick dip might be an indication of possible weakness to come but in this market its better not to make a quick conclusion after a day or two.

Major trend change level is below 14750 on closing basis. 2-4 sessions closing below 15450 would give indication of momentum being reduced. Continue to be stock specifc and above all dont be leveraged or on margin. With many trading stops being triggered today the amount of cash in portfolio should increase and if not then look to reduce exposures by booking profits or small losses in new trades.

Stocks to watchout for :

Maha Seamless almost did 285 tgt with high of 284.

Sterlite stopped out.

Reliance did 2120 then stopped.

Shriram gave intra day move to 355.

Voltas stopped out.

Glenmark and Ganesh hold but do your own research as investment picks.

Have reduced lot of exposure in short term trades due to trailing stop hits for advisory clients.

No new stocks for short term as i would prefer to wait and watch the next few sessions.

Some Quickgyan for a read:

Of all the speculative blunders there are few greater than trying to average a losing game. Always sell what shows you a loss and keep what shows you a profit.

You don’t need to trade everyday - there is the plain fool, who does the wrong thing at all times everywhere, but there is also the dalal street fool, who thinks he must trade all the time. No man can have adequate reasons for buying or selling stocks daily – or sufficient knowledge to make his play an intelligent play.

Losing money is the least of my troubles. A loss never troubles me after i take it. I forget it overnight. But being wrong – not taking the loss – that is what does the damage to the pocket book and to the soul.

A speculator must concern himself with making money out of the market and not with insisting that the markets must agree with him. Never argue with it or ask for reasons or explanations.

• The speculator’s deadly enemies are: ignorance, greed, fear and hope
• you must always put a stoploss to preserve capital
• a small loss or several small losses can easily be made back with one large profit but when you let large losses run against you it is hard to get them back.
• the fear of the market is the beginning of wisdom.
• never average a loss rather buy on the way towards profits.
• the most important of all ( huge fno traders and margin traders. )
• when you make a trade you should never risk more then 10% of your capital and if u have a few losses reduce your units of trade.

This article was written by Nooresh. He also writes on his own blog at Technical View by Nooresh

This entry was posted on Friday, August 7th, 2009 at 6:08 am and is filed under MoneyVidya Blogger Network. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.